The British pound rallied significantly during the course of the week to break above the 200 week EMA, and perhaps more importantly, the 1.35 handle. The 1.35 handle course will attract a certain amount of attention, and the fact that we are above it is a good sign. The question now is whether or not the British pound is going to continue to recover? This next week is going to be crucial, because the move has been so impulsive that one would think that it should continue with momentum but at this point in time we will probably have a couple of quiet days to kick off the week.

GBP/USD Video 03.01.22

Keep in mind that if we can continue going higher, the 1.37 area is interesting for this chart, as it has been both support and resistance previously, and it will almost certainly attract quite a bit of attention. To the downside, we could very well revisit the 200 week EMA, but that is probably something that will have more to do with the US dollar than anything else. The British pound has had a nice little bounce due to the fact that the UK decided not to lock itself down again, so the question now is whether or not the momentum can continue? I think this next week is going to be crucial so it is going to be difficult to put money to work between now and the end of it, but by the time we close out next week we will have everybody back to work full time, and liquidity will finally be back to normal. At that point, the move will be quite a bit easier to stomach.

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