The British pound drifted a bit lower during the trading session on Friday, as we are reaching below the 1.24 handle.
The British pound drifted a little bit lower during the trading session on Friday as the market has broken below the 1.24 handle, but not necessarily with any type of vigor or momentum. In other words, it is just a simple drifting into the weekend. With that being said, I do not read too much into this move and I think it is only a matter of time before we see some type of flattening out of the action. However, I do think that longer-term the British pound is going to run into issues, as the Brexit and a whole host of other issues coming out of the UK economy. As the economy reopens, it is doing so very slowly and of course that is going to cause issues.
Furthermore, traders will be looking towards the US Treasury markets in order to find safety in times like this, so it makes quite a bit of sense that we would see a bit of demand for the US dollar in that scenario as well. Ultimately, I think we are still kind of stuck in the short term “fading the rallies” type of market that we have been in for some time. With that being the case, I look for short-term rallies that I can fade based upon short-term candlesticks that also show wicks to the top. I would not get too big in my trading position, at least not yet. We need to chew through a lot of order flow in both directions to make the next impulsive move.#GBP/USD##UK##StocksDrop#
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