Yesterday, the Pound pair bounced upwards strongly after touching the main bullish channel’s support line that appears on the chart, to reach 1.3500 barrier, but began to decline again to push on the minor bullish channel’s support line and attempts to break it, which hints the price head to achieve new negative trades, on its way to visit 1.3250 followed by 1.3190 levels as next support levels.
We accept the domination of the bearish trend in the upcoming sessions; taking into consideration that breaching 1.3510 will stop the suggested negative scenario and lead the price to achieve new gains on the short term and medium term basis.
Regardless of the well-known pull of the liquidity drain that is coming through the end of this week due to the Christmas Day market closure and the likely low liquidity through until the opening trade of 2021, we have still witnessed a notable round of volatility to start this week. Nothing short of an exceptional run of systemically-important fundamental event risk would likely have been able to muster the kind of volatility we experienced this past session. Reports that a mutation of the Covid-19 in the United Kingdom was prompting concerns just as vaccines roll out was competing against weekend news that the US government was finally pushing through much-delayed stimulus.
The expected trading range for today is between 1.3275 support and 1.3475 resistance.
Although this week traders are facing low liquidity due to Christmas, we remain bearish as the dollar is expected to continue to weaken.