On Friday, the GBP/USD plummeted, as it passed the support of a monthly pivot point at 1.2345 and a 50.00% Fibonacci retracement level at 1.2311.
The rate had no technical support as low as the 1.2200 level, where it could meet with the 200-hour simple moving average.
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
It is likely that the currency pair could be pushed down by the 55– and 100-hour moving averages. However, note that the pair could gain support from the weekly PP, the Fibo 38.20% and the 200-hour SMA in the 1.2100/1.2200 area.If the given support cluster holds, it is likely that the British Pound could consolidate against the US Dollar. Otherwise, the exchange rate could target the Fibo 23.60% at 1.1814.
Hourly Chart
On the daily candle chart, the pair is located below the daily simple moving averages, which were located from 1.2660 to 1.2863. It signals that the rate could surge.
However, the pair faced the 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. This level has kept the rate down since March 27.
On Friday, the rate appeared to have bounced off the Fibonacci retracement level and begun to decline to the 38.20% retracement at 1.2217.
Daily chart
Read More: Technical Analysis
Traders are long on GBP/USD
On Friday, on the Swiss Foreign Exchange 57% of all open position volume was in long positions.
On Thursday, 60% of volume was in long positions.
It appears that, as the rate resumed its decline, traders closed some of their long positions and opened short positions.
On Thursday, 60% of volume was in long positions.
It appears that, as the rate resumed its decline, traders closed some of their long positions and opened short positions.