The British pound has fallen a bit during the trading session on Wednesday, only to turn around and show signs of life again. By doing so, it shows that the market is at least trying to recover a bit, but it should also be noted that we have recently seen a very stringent selloff and of course the United Kingdom is now looking to close its own economy down due to the coronavirus outbreak. Having said that, the 200 day EMA is sitting just above so that also offered resistance and we have recently broken down below the most recent low, so those two things alone could have people confirming a bit of a downtrend.
To the upside, the 1.30 level needs to be broken on a daily close in order for the buyers to take over again, although a bounce is certainly possible. Until the market clears that 1.30 level decisively, one has to look at rallies as potential selling opportunities, as there are far too many issues out there and of course the US dollar seems to be strengthening against a handful of currencies, so it would make sense that the greenback strength could transfer over into this market as well.
With all that being said, a break down below the bottom of the candlestick of course could open up the door to the 1.25 level which has been my longer-term target for a while now. Expect choppy and volatile trading conditions, because now we are starting to focus on Brexit again, which of course leads to all kinds of market manipulation via rumors. #GBP/USD##FX#
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