On Friday, the GBP/USD was testing the resistance of the 1.2300 level while being supported by the 1.2150. Meanwhile, the rate ignored pivot points, as round price levels were impacting the currency exchange rate.
In regards to the future, the rate was expected to surge, as soon as the 55-hour simple moving average catches up with the GBP/USD.
UK Monetary Policy
The British Pound depreciated against the US Dollar, following the UK Monetary Policy Statement release on Thursday at 12:00 GMT. The GBP/USD exchange currency rate lost 19 pips or 0.16% after the release. The Pound continued trading at the 1.1960 level against the Greenback after the release.The Bank of England released the UK Official Bank Rate data, which came in line with the expectations of 0.10%.
Note that the bank already cut interest rates in a previous emergency meeting. It explains why the market did not expect any action during the scheduled meeting.
Economic Calendar
Next week, data can be ignored, as the fundamental background is so much changed that historical data does not matter.
However, take a look at the list of previously notable events, as the markets will be looking at them to understand the impact of the virus.
GBP/USD short-term review
In regards to the near term future, the rate is expected to trade between the 1.2300 and 1.2150 levels until the 55-hour SMA approaches the rate. As the rate is approached by the simple moving average, the overbought pressure would decline.In the case of a surge, the currency exchange rate would next reach for the 1.2400 level. It is highly likely that this level would provide resistance, as the rate respects round price levels.
On the other hand, sideways trading could occur as long as Tuesday, as on Friday the 55-hour SMA was far below the rate.
Hourly Chart
On Thursday, it was reported that there is no resistance on the daily candle chart as high as the monthly S1 pivot point at 1.2187. That level was reached and the rate ended the day above that pivot point.
Meanwhile, take into account that the surge of GBP/USD should continue, as the rate has left the daily simple moving averages near the 1.2700 level. The rate is expected to climb higher to reduce some of the oversold pressure, which occurred due to the fundamental drop in the middle of March.
Daily chart
Read More: Technical Analysis
Long position amount declines
On Monday, 65% of open GBP/USD position volume on the Swiss Foreign Exchange was in long positions. By the middle of Tuesday's GMT trading hours, the sentiment was 68% long.
On Wednesday, the sentiment was already 70% long, and on Thursday, 72% long.
Traders were long before the recovery started. Moreover, others had joined, as the pair breaks resistance levels.
On Friday, some took profits, as 68% of open position volume was in long positions.
On Wednesday, the sentiment was already 70% long, and on Thursday, 72% long.
Traders were long before the recovery started. Moreover, others had joined, as the pair breaks resistance levels.
On Friday, some took profits, as 68% of open position volume was in long positions.