Since the middle of Wednesday's GMT trading hours, the GBP/USD has been testing the resistance of the 50.00% Fibonacci retracement level at 1.2418.
On Thursday, the rate was being approached by the 55 and 200-hour simple moving averages. The support of the SMAs could push the rate through the mentioned Fibo and another resistance level at 1.2430.
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.
In regards to the week up to April 10, Producers Price Index and Consumer Price Index could cause notable reactions above 20 pips. Previously, the release of these data sets did not cause an increase of exchange rate volatility.
Next 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 previously ignored 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
Yesterday, the GBP/USD exchange rate broke the short-term descending channel. However, during Wednesday morning, the rate revealed new short-term descending channel.From a theoretical perspective, 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.
However, note that the exchange rate is supported by the 55-hour SMA near 1.2300. Thus, it is likely that the rate could break the upper channel line, and some upside potential could prevail. However, note that the rate would have to surpass the monthly PP at 1.2345.
Hourly Chart
On the daily candle chart, the pair bounced off the support of the 38.20% Fibonacci retracement level at 1.2217. It could once again face the resistance of the 1.2465 level, where a 50.00% Fibo is located at.
Meanwhile, take into account that the pair is still slightly oversold, as the daily simple moving averages are located above the 1.2580 level.
Daily chart
The sentiment has remained almost unchanged since Tuesday, as it had become 57% short on Wednesday.