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The British pound faces significant weakness as it tries to rally during Thursday’s trading session.
- The GBP/USD continues to face weakness as it tries to rally during Thursday’s trading session but fails to maintain its gains.
- The 1.20 level is a significant area of interest as it is a large, round, and psychologically important figure where we can expect to see a fight.
- However, if the market breaks down below this level, it could signal a drop to the 1.1850 level.
Investors remain cautious about the financial banking system and global growth, leading to a surge in demand for the US dollar as a safe asset. As a result, rallies in the pound should be viewed with suspicion, and there is a possibility of seeing a lot of momentum in the bond market as people rush toward safety.
During Thursday’s session, the market attempted to rally but gave up its gains at the 200-Day EMA, which is a psychologically and structurally important level to watch. There is a high probability of witnessing a lot of demand for US dollars, which could lead to a drop in the pound soon.
If the market breaks down below the 1.1850 level, there is a possibility of going down to the 1.15 level, which has been significant in the past and holds psychological importance. However, if there is a sudden surge in momentum towards the upside, we could see a move to the 1.23 level, an area that had sold off previously.
The double top that formed at the 1.24 level is a significant area of resistance that is unlikely to be overtaken anytime soon. Therefore, if the market attempts to move towards this level, it should be viewed with caution.
TLDR; the British pound faces significant weakness as it tries to rally during Thursday’s trading session. Investors remain cautious about the financial banking system and global growth, leading to a surge in demand for the US dollar as a safe asset. As a result, it is highly likely that we will see a lot of momentum in the bond market as people rush toward safety. The 1.20 level remains a significant area of interest, and a break below this level could signal a drop to the 1.1850 level. However, if the market attempts to move towards the 1.23 level or the double top at 1.24, it should be viewed with caution.
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