The British pound retreated somewhat over the week, but then turned to cross the 1.36 mark. In doing so, it looks like we are ready to go higher and it is worth paying attention that the US dollar is losing strength in general. If we can get under the 88 handle of the US dollar index, it will be the end of the greenback, lease for now. The candlestick looks very bullish in this pair, although the British pound obviously has a lot of negativity at the moment. This shows how weak the US dollar is at the moment, and therefore I believe the British pound will be lifted accordingly.
Video GBP / USD 04.01.20
If we fail from here on out, the 200 week EMA is near the 1.3150 level and should offer a bit of a “market floor”. At this point, it is very likely that the British Pound is heading towards the 1.40 level over the next few months, and when you look at the longer term charts you can see that we have formed a major low. pattern and you might even make an argument for a very ugly reverse head and shoulders. Either way, it looks like the US stimulus is the only thing people are paying attention to, and it’s worth noting that the British pound is historically cheap at the moment. At this point the market looks very bullish and should continue.
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