During Thursday morning, the GBP/USD exchange rate jumped was testing the resistance level formed by the Fibonacci 38.20% retracement and the monthly PP at 1.2920.
If the given resistance does not hold, some upside potential could prevail in the market.
Fed Rate Cut
The Federal Open Market Committee cut the Federal Funds Rate to a target range of 1.00% to 1.25% at an unscheduled emergency meeting.
The US policymakers announced the cut of the interest rate by a half of a percentage point in response to the increasing economic threat from the coronavirus outbreak.
Economic Calendar
On Friday, the US employment data will be released at 13:30 GMT. The event has caused moves from 16.2 to 51.3 pips since October.
This event consists of three data sets – the Unemployment Rate, Non-Farm Employment Change and the Average Hourly Earnings.
Meanwhile, the week's data is available. Click on the link below to see the historical data tables with the reactions to various events.
Read More: 02.03-06.03 Event Historical Reactions
GBP/USD short-term review
Yesterday, the GBP/USD exchange rate raised to the 1.2880 level. During Thursday morning, the rate was testing the resistance level formed by the Fibo 38.20% and the monthly PP at 1.2920.If the given resistance level holds, it is likely that a reversal south could occur in the nearest future. In this case it is unlikely that the currency pair could decline below the 55– and 100-hour SMAs near 1.2820.
Otherwise, it is likely that the British Pound could appreciate against the US Dollar in the short term. In this case the exchange rate could target the weekly R1 located at 1.2985.
Hourly Chart
On the daily candle chart, the rate has close by the support of the 200-day simple moving average, which was strengthening the weekly S1 pivot point near 1.2700.
Daily chart
Read More: Technical Analysis
Traders are neutral
Since Tuesday, 51% of open GBP/USD position volume on the Swiss Foreign Exchange was in long positions.
On Thursday, trader orders were bearish. In the 100-pip range, 30% of orders were to buy and 70% were sell orders.
On Thursday, trader orders were bearish. In the 100-pip range, 30% of orders were to buy and 70% were sell orders.