The surge of the GBP/USD has reached the resistance of a weekly R1 simple pivot point at 1.2576. Since the end of last week the pair has been pushed up by the combination of the 55 and 100-hour simple moving averages.
In regards to the near term future, the rate was expected to trade between 1.2520 and 1.2580.
Economic Calendar
Due to the fundamental changes in the markets, Dukascopy Analytics suggests 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.
During the week, data is bound to reveal, how the coronavirus has continued to impact the US economy.
On Wednesday, the US Retail Sales data sets are bound to be published at 12:30 GMT. Most likely they will surprise the markets with the reveal of a drop in US consumption.
On Thursday, all attention is expected to be set on the weekly US Unemployment Claims. During the last weeks this announcement has been revealing shocking data, as during the two week period almost ten million US workers claimed unemployment benefits. The unemployment claims were previously ignored as they had stopped causing market reactions.
GBP/USD short-term review
As apparent on the chart, the GBP/USD exchange rate has exceeded the 1.2500 level. During today's morning, the rate was testing the resistance level—the weekly R1 at 1.2576.If the given resistance holds, it is likely that the currency pair could reverse south in the nearest future. In this unlikely case the pair could drop below the Fibo 50.00% at 1.2418.
On the other hand, the exchange rate could gain support from the 55-hour SMA near 1.2500 and continue to extend gains in the short run. Note that the rate would face the resistance –the Fibo 61.80% at 1.2646.
However, if the pivot point's resistance holds, the British Pound could trade sideways against the US Dollar in the short term.
Hourly Chart
On the daily candle chart, the pair has the additional resistance of the 55 and 200-day simple moving averages at 1.2627 and 1.2693.
Meanwhile, on the daily candle chart there is marked the support of the 50.00% Fibonacci retracement level near 1.2465.
Daily chart
Read More: Technical Analysis
Traders are neutral on GBP/USD
On Thursday, on the Swiss Foreign Exchange 56% of all open position volume was in long positions.
By the middle of Tuesday's GMT trading hours, the sentiment had declined to 52% long. Traders had become neutral on the pair.
By the middle of Tuesday's GMT trading hours, the sentiment had declined to 52% long. Traders had become neutral on the pair.