The British pound rallied a bit against the US dollar to kick off the week, but it seems as if the 1.23 level is going to cause a little bit of an issue. The so-called “death cross” is kicking off during the session, when the 50 day EMA drops below the 200 day EMA. At this point, there seems to be a little bit of a pullback from the round figure along with that death cross, and because of this I believe that the market is going to continue to go a little bit lower. It’s possible that we do get a move short-term to the upside initially, but I do see a lot of noise near the 1.2450 level, which should continue to hold, especially considering that the market gapped lower to kick off the session.
GBP/USD Video 07.04.20
If we do break down from here it’s likely that the market will go looking towards 1.20 region, as it is a large, round, psychologically significant figure and of course the structural support and resistance that we see in the past. That being said, it’s very unlikely to see a clean move regardless, as there are so many different concerns out there when it comes to the coronavirus and global growth or perhaps better stated, the lack of. Furthermore, the United Kingdom has to deal with Brexit down the road, so let’s not forget that there are long days ahead of the United Kingdom to get back to normalcy. With that in mind, I do believe there’s probably more downward pressure than up.
This article was originally posted on FX Empire
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