On Tuesday, the GBP/USD fulfilled one of the previously described scenarios, as it broke the resistance of the 55-hour simple moving average and reached for the resistance of the 1.2450 level. Afterwards, the rate bounced off this level.
On Wednesday, the rate had declined to the support of the new simple monthly pivot point at 1.2345. In addition, the pair restarted to respect the resistance of the 55-hour SMA.
Economic Calendar
This week, data can be ignored, as the fundamental background is changed in a way that historical data does not matter.
However, take a look at the list of previously notable events, as the markets will be looking at them to understand the impact of the coronavirus.
GBP/USD short-term review
In regards to the near term future, the pair was set to get squeezed in between the resistance of the 55-hour SMA near 1.2380 and the support of the monthly pivot point at 1.2345 and the 100-hour simple moving average.The most likely scenario is that the pair breaks out from the squeeze to the upside. In this case, the rate would once again test the 1.2450 level. The 1.2450 could be passed with the additional support of the 55 and 100-hour simple moving averages. Namely, these levels have to push the pair up.
On the other hand, the GBP/USD could trade sideways between the 1.2380 and 1.3210 levels.
Hourly Chart
On the daily candle chart, the pair is located below the daily simple moving averages, which were located from 1.2665 to 1.2877. It signals that the rate could continue to surge.
However, the pair faces a 50.00% Fibonacci retracement level at the 1.2465 level. It can be measured by connecting the March low level with the December high level.
Daily chart
Read More: Technical Analysis
Long sentiment continues to decline
Last Friday, 68% of open position volume on the Swiss Foreign Exchange was in long positions.
Since then, the sentiment has been gradually declining, as by the middle of Wednesday's GMT trading hours, the sentiment was 58% long.
As the pair does not surge higher, traders, which had open long positions last week, are taking profits.
Since then, the sentiment has been gradually declining, as by the middle of Wednesday's GMT trading hours, the sentiment was 58% long.
As the pair does not surge higher, traders, which had open long positions last week, are taking profits.