Last week we saw GBPEUR hit a short term high of 1.1440- this partly due to traders buying the Pound aggressively over the last week- and also the fact that investors are unhappy with how the ECB is dealing with the economic effects of Covid19- so the Euro has been sold off across the board- bringing EURUSD down to 1.08- with the potential to go lower.
Over this next week, I see the potential for some consolidation with Sterling- we closed slightly lower on Friday which suggests that traders are not confident in holding Sterling positions over the weekend- this could be due to the fact that the UK death toll is rising sharply, and with lack of testing in the UK, it is uncertain how long the UK economy is going to be on lockdown.
Sterling strength has recently come from the fact that investor appetite has returned (courtesy of the Fed’s massive intervention)- but the reality is this situation will lead us into another recession- and I do personally feel that the market moves in April will be a lot worse than what we saw in March- so I do personally feel we will see Sterling move lower with stock markets.
The Dollar is still King- and I think we will see the US Dollar continue to strengthen over the next week- which will mean both GBPUSD and EURUSD could move lower.
It is important to watch the Pound closely at the moment, and lock in gains as they come- the market has become extremely volatile- so much so that it is making the market moves during Brexit look like a normal day of trading!
If you have specific rates you are targetting- please don’t hesitate to let me know and we can put orders into the market for you to help you take advantage when the market moves in your favour.