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Christopher Lewis
GBP/USD

The British pound has fallen during the trading session on Friday, as the jobs number came out seven times worse than anticipated. That being said though, a lot of the action has already been priced in as the initial jobless claims on Thursday were horrific, and the numbers are more than likely only going to get worse. With that being the case, it’s very likely that the markets are simply looking for the next catalyst, and that’s not going to be US employment. In fact, markets are moving on basically one thing only, and that is the coronavirus figures.

GBP/USD Video 06.04.20

Looking at the chart, if we break down below the lows of the week then we go looking towards 1.20 level. To the upside if we were to break above the 1.25 handle, the market likely goes to the 1.2750 level. At this point though, I still believe there is a lot of downward pressure and for what it’s worth there is the so-called “death cross” above getting ready to form and it’s likely that the market will be paying close attention to that as well.

Longer term, if I had to guess I would suspect that this market probably drops significantly as the world prices in much darker economic conditions going forward. That being said, the reaction to the jobs figure was almost nothing, and therefore it shows that it was already priced in. All things being equal, we probably have a lot of choppiness ahead of us with more of a downward slope from what I can see.

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