The British pound rallied a bit during the trading session on Tuesday, reaching the highs of the previous couple of sessions, and now looks to be set on trying to reach towards the 1.30 level. This is a market that of course has a lot to deal with, not the least of which would be extreme US dollar strength. Nonetheless, it’s very likely that the market will find a bit of trouble in that area but recovering 1.30 would of course be a strong sign.
GBP/USD Video 12.02.20
If that’s going to be the case, the market then goes looking towards the 1.32 handle, and a breakout above their opens up the door towards the 1.35 level. This is a market that continues to be very noisy and of course with the next couple of days featuring Jerome Powell speaking in front of Congress, there will be a lot of movement when it comes to the US dollar. Ultimately, there shouldn’t be too much said to spook the markets, but you never know as anything is possible.
If the US dollar suddenly strengthens, then obviously will have its effect over here as well. Alternately, if he says something to suggest weakness, then it’s very likely the pair will roll over. Nonetheless, I still believe that the downside is somewhat limited, and that buyers will return given enough time. This is a market that certainly looks as if it is trying to find its bottom, so given enough time I would not be surprised at all to see the 1.30 level retaken. To the downside, the market breaks down below the bottom of the last couple of trading sessions, then the market could go down to the 1.28 handle.
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This article was originally posted on FX Empire
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