The pound rallied significantly over the week to break through the 200-week EMA mark, and perhaps more importantly, the 1.35 grip. The course of the round at 1.35 will attract some attention, and the fact that we are above is a good sign. The question now is whether or not the pound will continue to recover? Next week is going to be crucial, as the move has been so impulsive you would think it should keep up the momentum, but at this point we’ll likely have a few quiet days to kick off the week.
Video GBP / USD 03.01.22
Keep in mind that while we can keep moving higher, the 1.37 area is interesting for this chart as it has been both support and resistance before, and it will almost certainly get quite a bit of attention. On the downside, we could very well revisit the 200 week EMA, but that’s probably something that will have more to do with the US dollar than anything else. The pound has seen a nice little rebound due to the UK deciding not to lock in again, so the question now is whether or not the momentum can continue. I think next week is going to be crucial so it will be hard to put money to work by the end of it, but by the end of next week everyone will be back to work full time , and liquidity will finally be back to normal. At this point, the movement will be a little easier to digest.