Political upheaval in the U.K., sharp changes in tax policy and increased unplanned budget spending, as well as the spread in the interest rate differential, are negative fundamentals for the pound in the medium term.


Major investment banks expect the pound to hit new lows this quarter, which will be a medium-term low in 2023 as well. to have a recovery to levels around 1.15.

For the first quarter, the largest coincidence of expectations is in the zone 1.09 – 1.10.


The currency pair is in a downward trend, currently the price has found support in the area of the lowest historical bottom. The main resistance is the trend line of the descending channel, you also coincide with the horizontal resistance in the zone 1.20 – 1.23.

The upward correction was limited to the 38.2% Fibo of the last wave and the descending trend line.

Sequential started a new countdown, the oscillator is approaching the oversold zone, I expect the development of a new downward wave with a potential target in the zone of 1.07 – 1.05.


Positioning with a slight return near the resistance and the descending trend line (the outlined sell zone – 1.1380 – 1.1480) will give a good Risk/Reward ratio of approximately 1/3.5.


A return and close of the price on a daily basis above the trend line and the last peak will mean that the upward correction is not complete and there is a potential for a test of the main downward resistance in the area of 1.20.

 Dealer Radoslav Valov

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