On Tuesday morning, the GBP/USD bounced off a supporting trend line and surged up to the 1.2350 level. By doing this, the currency exchange rate revealed a channel down pattern.
Meanwhile, the rate managed to pass the resistance of the 55, 100 and 200-hour simple moving averages and the simple weekly pivot point.
Economic Calendar
As it occurred during the last week, due to the fundamental changes in the markets, Dukascopy Analytics suggest to note the scheduled macroeconomic events, but avoid using historical data for guidance.
Namely, the whole world changes the money supply by announcing monetary stimulus and government expense increases. In other words, the central banks are creating more money and giving it to governments to stop the effects of the coronavirus. In effect, each announcement causes a fall of the currency that it affects.
However, click on the link and take a look at the last reactions to various events in March. Even already ignored events like Producers Price Index and Consumer Price Index caused notable reactions above 20 pips. Previously, the release of these data sets did not cause an increase of exchange rate volatility.
GBP/USD short-term review
Yesterday, the GBP/USD exchange rate tried to surpass the weekly PP at 1.2318. During Tuesday morning, the rate tested the upper boundary of a short-term descending channel.From a theoretical point of view, it is likely that some downside potential could prevail in the market. In this case the currency pair could target the Fibo 38.20% at 1.2190.
Otherwise, the exchange rate could gain support from the 55-hour SMA near 1.2280 and break the upper channel line and go up. Note that the rate would have to surpass the monthly PP at 1.2345. If the given level holds, the rate could consolidate in the short run.
Hourly Chart
On the daily candle chart, the pair is testing the support of the 38.20% Fibonacci retracement level at 1.2217.
If this level gets passed, the rate would step by step reach for the 23.60% Fibo at 1.1910. On the other hand, the pair might rebound and surge back up to the resistance of the 1.2465 mark.
Daily chart
Since the middle of Monday's GMT trading hours, the sentiment was 55% long.