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Market Updates

16 Mar. 2020

GBP/USD trying to recover but may further slide in the near term!!

“Someone is sitting in the shade today because someone planted a tree a long time ago”

- Warren Buffet


The News.


The Pound was on the back foot against the U.S dollar, falling to a 5 month low of $1.2252 on Friday, owing to a surprising interest rates cut by 50 bps to 0.25% from the Bank of England last week to counter the impact of the coronavirus (COVID-19) pandemic on the U.K economy, while lingering EU-UK trade uncertainties weighed down on the cable.


However, the pair managed to bounce back to $1.2345 early in Asian session after the U.S Federal Reserve on Sunday announced a surprise rate cut to 0.25%.  


The latest announcement triggered a fresh leg down on the greenback which eventually provided some immediate respite to the Pound Sterling.



Technical outlook -


GBP/USD trying to recover but pointing to further slide in the near term


The Pound slumped to a 5 month low of $1.2250 on Friday before bouncing back to as high as $ 1.2433, recovering almost 200 pips, following Fed announcement on Sunday. Yet, the pair failed to gather further momentum in Asia this morning, before falling back to $1.2340, as of writing.


Corrective setback in wave C of Wave (2) could be nearing soon!!


On an Elliott Wave perspective, the impulsive downward trend from $1.3203  started on 9th March 2020 to $1.2250 on last Friday looks incomplete, the Pound may  potential turn south again to $1.2150/1.2190 level before triggering a strong U-turn to the upside!


On the Flipside, a break above $1.2490 would confirmed a bullish reversal and back above $1.3200 level for the Pound.


GBP/USD- Hourly & 10 Mins Charts




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