The British pound has rallied a bit during the trading session on Thursday, reaching towards the 1.2260 level, before rolling over and showing signs of weakness again. It’s obvious that the British pound still has a “weight around its neck”, and therefore will continue to struggle overall. At this point, the 1.22 level underneath continues offer significant support, but if we do break down below there, and it’s looking increasingly likely, the market could fall another 200 pips.
GBP/USD Video 11.10.19
Keep in mind that the Brexit will continue to throw headlines around that will also for this pair around but given enough time the market will continue to show a lot of weakness from everything that we’ve seen. However, we have not broken that significant barrier at the 1.22 level, which is also the 61.8% Fibonacci retracement level. That level giving way typically opens up the door to the 100% Fibonacci retracement level, but at this point I think the 1.20 level is probably the more likely target. The consolidation was 200 pips that we are trying to break down through, so you just simply extrapolate that move down to the 1.20 level.
Looking at the chart, it’s very likely that we will continue the longer-term downtrend, because quite frankly nothing good has been coming out of Brexit and I don’t see that this is going to be easy for the buyers to take the British pound higher. It’s very likely that every rally will continue to be a selling opportunity, at least until we get some type of clarity with what’s going to happen between the British and the Europeans.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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