The British pound initially tried to rally during the week but then fell hard to crashing into the 1.30 level. That is an area that on shorter-term charts shows that there is support down to the 1.2950 level. If we break down below the 1.2950 level, then the market will very likely reach down towards the 100% Fibonacci retracement level which is basically the 1.28 handle, and then down to the 1.27 level.
GBP/USD Video 22.04.19
Looking at the charts, we have been falling rather steadily, and at this point it makes sense that we drift a bit lower because the Brexit, although delayed by six months, but still going to be a bit of an issue and as we have a lack of clarity in that scenario, and a lack of hustle when it comes to fixing it, it's very likely that we will simply see the British pound drift lower, not necessarily due to super negative news, more like we just don't have any catalyst to go higher.
If we do bounce from this area, it's not until we break above the 1.3150 level that buyers will start to take over. At that point we could probably go to the 1.3350 level which has been resistance in the past. Quite frankly though, I believe that it's obvious that rallies are to be sold by short-term traders, as the market simply doesn't offer a significant amount of clarity to put a lot of faith and, so at this point longer-term traders are probably going to be looking for value at lower levels.
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This article was originally posted on FX Empire