IMO, the UK will be one of the nations in the G10 to have the hardest time recovering in the Post-COVID Era.
The UK was already struggling before the lock downs as productivity measures have remained relatively flat since 2008. Immigration into the country is high in proportion to the nation's Emigration. That means more people to feed and more costs associated with Government. National debt has skyrocket and Unemployment figures only reach 4% in 2018 before Pre-COVID. Inflation targets are not being met and now the Globe is facing a deflationary period causing the UK to lower it's interest rate that has been in place for years with a new 0.10% on May 7th. 2020.
The chart reflects this risk by a constant falling of GBP value. Hence, it riskier overall to hold The Pound, relatively.
The Weekly shows price action in a range between 126.4 - 122.0, breaking the range on the the week of May 11th and holding true in the week of May 18th.
Price action clearly underneath the Monthly S4 pivot of 124, suggesting breakout to the downside.
Given the risk of holding the Pound due to COVID-19 Recovery and Brexit, not to mention the economic factors listed above, it is possible to see the Pound test the 122.8 - 119.5, which is the close and low the week of September 03, 2019.
Short-term we may see hedging of the Pound to keep it in the range of 124.0, pushing price action back up into range, but considering the risk of holding the Pound + the break and hold..more downside is likely.
The Daily reflects the break and hold. Also, it should be noted that the short-term 13 EMA is also crossing the slower-reacting 48 WMA.
The COT Report hows that 30.5% of all open interest is Short, and increase from May 12 - May 19 vs of 3.3% vs 19.9% Long, representing a 1.0% increase during the same time period.
This should give a Bearish Bias to most Pound pairs to include:
GU, GJ, GN, and GA.
*This is only speculation and does not constitute as financial advice. Neither are all speculators 100%. The rest is up to you!*
The UK was already struggling before the lock downs as productivity measures have remained relatively flat since 2008. Immigration into the country is high in proportion to the nation's Emigration. That means more people to feed and more costs associated with Government. National debt has skyrocket and Unemployment figures only reach 4% in 2018 before Pre-COVID. Inflation targets are not being met and now the Globe is facing a deflationary period causing the UK to lower it's interest rate that has been in place for years with a new 0.10% on May 7th. 2020.
The chart reflects this risk by a constant falling of GBP value. Hence, it riskier overall to hold The Pound, relatively.
The Weekly shows price action in a range between 126.4 - 122.0, breaking the range on the the week of May 11th and holding true in the week of May 18th.
Price action clearly underneath the Monthly S4 pivot of 124, suggesting breakout to the downside.
Given the risk of holding the Pound due to COVID-19 Recovery and Brexit, not to mention the economic factors listed above, it is possible to see the Pound test the 122.8 - 119.5, which is the close and low the week of September 03, 2019.
Short-term we may see hedging of the Pound to keep it in the range of 124.0, pushing price action back up into range, but considering the risk of holding the Pound + the break and hold..more downside is likely.
The Daily reflects the break and hold. Also, it should be noted that the short-term 13 EMA is also crossing the slower-reacting 48 WMA.
The COT Report hows that 30.5% of all open interest is Short, and increase from May 12 - May 19 vs of 3.3% vs 19.9% Long, representing a 1.0% increase during the same time period.
This should give a Bearish Bias to most Pound pairs to include:
GU, GJ, GN, and GA.
*This is only speculation and does not constitute as financial advice. Neither are all speculators 100%. The rest is up to you!*