The British pound fell to kick off the trading session on Monday to kick off the week as coronavirus lockdowns and concerns in the UK weigh on the British pound. Also, there was a lack of liquidity in the markets due to the fact that it was trading during the holidays, which of course meant that the market was moving much faster than usual. The 50-day EMA has held up so far, as has the 1.3250 level. This was an area that has been important more than once, so it is interesting that we have held here.
Video GBP / USD 22.12.20
The stimulus in the US will continue to weigh on the US dollar, but there was a clear race to safety during Asian trading, which lasted throughout the European session. That being said, it’s a market that appears to be slowing down as New York City leaps in line, possibly in an attempt to sort everything out a bit after this massive move. Ultimately this is a market that should continue to be very noisy, but the question now is whether or not we are going to recover anytime soon? All other things being equal, I think there are still arguments to be made on the upside but obviously things need to calm down.
Remember, the markets always seemed to find a reason to buy sterling, and with the Brexit talks still ongoing, one thing said it would only be a matter of time before some sort of good news hits the market and sends the British. beat in the air. That being said, I would be very careful about the size of my position.
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