The British pound initially tried to rally during the trading session on Monday but gave back the gains just above the 1.24 level. By rolling over just above that level, then the market plunged back towards the lows of the previous week. By doing so, it shows just how weak the British pound is in the face of absolute panic that the markets are dealing with right now. Because of this, there is going to be a massive bounce at one point or another, but it does not look like it’s ready to happen quite yet. At this point, I believe that we will see the 1.20 level tested eventually.
To the upside, the 1.25 level will probably cause issues, and signs of exhaustion in that area will be sold into. Simply looking for short-term rallies that you can sell will probably be the best way to go, as the market has been all over the place in general. At this point, the massive selloff that we had seen last week is more than likely going to show continuation, but we will probably get some type of relief rally as per usual. At this point, that’s going to be the best trade, simply squashing that relief rally unless something substantially changes in the outlook of the virus, which doesn’t look very likely to happen in the short term. That being said, keep your position size relatively small this is going to be very dangerous. I have not seen trading like this since 2008.
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