GBP Pairs Gapped up Massively: Maniacal Volatility to Follow

GBP Pairs Gapped up Massively: Maniacal Volatility to Follow

The British Pound is still without a doubt the biggest factor in today’s and week’s trading, as it spurs the Conservative victory in the British elections.

Boris Johnson pledged that the country would complete Britain’s exit from the European Union by the deadline of January 31, without any doubts. This is what the market trusts so strongly now.

The GBP / USD pair recorded massive increases late on Thursday, breaking through barrier levels due to maniacal volatility. The pair reached the barrier at 1.35 but withdrew. On the downside, there is support at 1.3380. On Friday morning, the rate turned south.

The markets were happy with the results of the political elections, as the pound rose more than 2 percent. The currency quickly crossed the 1.35 line, its highest level since May 2018. We may record some pullbacks from the GBP / USD after these sharp increases due to the closing of the gains, but at the moment, its a trance in the markets.

It is almost certain that the British pound will continue to devalue against the US dollar in the short term. Regarding this situation, we noticed that the pair may be bolstered by level support at 1.3339.

If the specified support level remains firm, it is almost possible that the British pound will consolidate against the dollar shortly. Another thing, the price could drop to structured support according to the weekly pattern, at 1.3240.

Other Major Pound Pairs
The GBP / USD and GBP / JPY fell after the strong rally this week. However, the short-term trend may remain bullish as long as the 1.3050 and 142.47 support are held separately. Likewise, while EUR / GBP is recovering, the trend may remain bearish as long as the 0.8508 barrier remains intact.

The British pound is now fully fortified while a major obstacle to Britain’s exit from the European Union, which will be eliminated with the victory of the Conservatives in the political elections in the United Kingdom has been achieved.

In any case, this is not in any way shape or formation of a stopping point for the pound maniacal volatility to follow and risk sentiments. However, it is likely to pound volatility quieten down now and over the holiday period.

Nonetheless, in the new year, when the withdrawal bill is confirmed, pound traders will quickly focus on the time frame for change, which will continue until the end of 2020. This means Boris Johnson has only one year to organize an economic deal, an ambitious goal.

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Author : Azeez Mustapha


Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.