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Daily market commentary: The pound is quite simply collapsing



ActivTrades’ Market Analysts prepared their daily commentary on traditional markets for March 19, 2020. This is not a trading advice. See details below:

FOREX

The pound is quite simply collapsing on currency markets. The U-turn of Boris Johnson’s government on the measures to be adopted for containing the coronavirus generated a new selloff on the pound. In just 72 hours the government changed its mind and closed schools, and asked people to limit all non-essential travel. Markets are pricing a likely lockdown of the country with the pound now at a 35-year low against the US dollar.

In just 10 days, the cable (GBP/USD) has fallen from 1.30 to 1.15 (see attached chart), confirming the exodus by investors from the pound. The Bank of England’s rate cut, combined with Brexit uncertainty and now the growing chance of a lockdown are hurting the British currency, with the huge volatility across markets further exacerbating its collapse.

Carlo Alberto De Casa – Chief analyst, ActivTrades

Daily Market analysis

OIL 

Oil is experiencing a perfect storm in which coronavirus is destroying the demand side, while supply is overwhelmed by the deluge on offer from Saudi Arabia. As a result, the price crashed to an historic low at $20, before attempting a rebound to $23. This scenario will probably not last for long, as for both Russia and Saudi Arabia this oil war is damaging and needs to be resolved.

Meanwhile from a technical perspective, $21.50 provides the main support with the first resistance zone is at $23.40. However, in such a volatile situation we can expect to see frequent price spikes.

Carlo Alberto De Casa – Chief analyst, ActivTrades

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Daily market commentary: The pound is quite simply collapsing

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