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GBPUSD – Will 1.2000 Hold?
It’s been another relentless day of selling in the pound as the threat of Brexit continues to weigh over the unit like the sword of Damocles. The pair has now sliced through the 1.2300, 1.2200 and 1.2100 figures as it approaches the key 1.2000 support from the spike lows set last week.
The econ calendar this week is light, but the pair continues to ignore fundamental data and moves on headlines out of UK. The latest threat was an internal governmental report that suggested UK economy could collapse by 9.5% in the wake of Brexit trigger next year.
Still, the pair is now so grossly oversold that it is prime for a massive short covering rally that could be triggered by anything as benign as headline stating that PM May is willing to compromise on the immigration issue. For now, the 1.2000 level is the key support while 1.2450 is a massive overhead resistance that is likely to stay in place unless the dynamics of the story change markedly.