At mid-day on Wednesday, the rate was testing the support of the 1.2500 level. In the meantime, the pair had passed the support of the 100-hour simple moving average at 1.2513.
In theory, the pair should decline to a combination of two technical support levels near 1.2415.
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
On Tuesday, the scenario of a surge became reality, as the pair reached for the 61.80% Fibonacci retracement level at 1.2646, which was strengthening the resistance of the 1.2650 level. The rate bounced off this level and by mid-Wednesday had reached the 1.2500 level.In regards to the future, the rate is expected to pass the support of the 1.2500 level and decline as low as the 50.00% Fibo and a 200-hour simple moving average at 1.2415. This scenario is favoured due to the rate facing the resistance of the 55 and 100-hour SMAs at 1.2554 and 1.2513.
However, a fundamental announcement that would beat down the USD or strengthen the GBP could help the rate in passing the two SMAs. In this case the weekly R1 simple pivot point could provide resistance at 1.2576.
Hourly Chart
On the daily candle chart, the pair has the additional resistance of the 55 and 200-day simple moving averages at 1.2620 and 1.2692.
Daily chart
Read More: Technical Analysis
Traders are neutral on GBP/USD
Since the middle of Tuesday's GMT trading hours, on the Swiss Foreign Exchange 52% of all open position volume was in long positions.
On Wednesday, traders remained neutral despite the pair's recent volatility.
On Wednesday, traders remained neutral despite the pair's recent volatility.