The British pound rebounded significantly during the trading week, breaking above the 1.3250 level. However, the market gave up some of the gains over the entire weekend, perhaps because people are curious about what will happen with the Brexit deal, or perhaps the lack thereof. After all, the market will continue to receive many questions about how Brexit works. People are evaluating the possibility of a certain type of deal, and for what it’s worth, Citigroup has suggested that there is about an 80% chance of getting a deal done. This has pushed the pound higher in recent months and appears to be recovering. That said, it should be noted that there is still a chance that they will not come to some kind of agreement. If they don’t, the British pound is going to fall quite hard.
Video GBP / USD 23.11.20
Over the next two weeks, we should get a little more clarity, and I think that’s more important. The level of 1.30 below should be supported, unless of course we end up with some sort of ‘no-deal Brexit’ situation which would then almost certainly lead to a market crash. I think short-term pullbacks probably offer buying opportunities, as the next few weeks will be a bit tense. There is definitely a bigger reaction to the downside than the top right now, which means if we get some kind of deal it will likely send this market back to the 1.35 handle. However, if we don’t have an agreement, who knows where we are?