The pound rallied to break through the 1.35 level during the week but continues to struggle to stay above that level as we still do not have a full breakdown of how the situation will be resolved. of Brexit. That being said, it’s very likely that we’ll continue to see a lot of noise in the headlines, which of course will boost sentiment. Sadly, there’s no way of knowing whether or not they’re actually going to figure something out, but it seems like lately we’ve seen a little more optimism.
Video GBP / USD 21.12.20
On the upside, the market could move towards the 1.3750 level, maybe even as high as the 1.40 level, but we would need a significant break above the 1.35 level for the confirm, probably due to the news of Brexit. There is stimulus in the US so it helps the pound a little bit, but at this point I think what we see here is a scenario where we continue to be held hostage by the latter. headlines and rumors. Comments from ‘senior officials’ in places like Brussels and London continue to manipulate the market through the press, and that’s of course something I don’t see changing anytime soon. With that, I think we still have several headaches ahead of us as the market just has no idea what to do with itself.
Add to all this the fact that algorithms now read headlines and tweets to gamble in the markets, you have a perfect example of a disaster just waiting to happen. Longer term, I think we’re going higher, but there are a lot of headwinds.