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Home ANALYSIS

GBPUSD falls to new session lows and back below 100 hour moving average

A.R Chowdhury by A.R Chowdhury
March 3, 2022
Reading Time: 4 mins read
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GBPUSD falls to new session lows and back below 100 hour moving average

GBPUSD

GBPUSD moves back below the 100 hour moving average

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The  GBPUSD 
GBP/USD

The GBP/USD is the currency pair encompassing the United Kingdom’s currency, the British pound sterling (symbol £, code GBP), and the dollar of the United States of America (symbol $, code USD). The pair’s rate indicates how many US dollars are needed in order to purchase one British pound. For example, when the GBP/USD is trading at 1.5000, it means 1 pound is equivalent to 1.5 dollars. The GBP/USD is the fourth most traded currency pair on the forex exchange market, giving it ample liquidity and a low spread. Whilst the spreads of currency pairs vary from broker to broker, generally speaking, the GBP/USD often stays within the 1 pip to 3 pip spread range, making it a decent candidate for scalping. The GBP/USD pair, also informally known as “cable” (due to transatlantic cables being used to transmit its exchange rate via telegraph back in the 19th century) has a positive correlation with the EUR/USD, and a negative correlation with the USD/CHF. Trading the GBP/USDWhilst a lot of traders and even brokers will assert that the best time to trade the GBP/USD is during its most active hours during London and New York, doing so can be a double-edged sword due to the often-unpredictable nature of the pair. Its volatility also fluctuates often, and so what could be a profitable looking strategy one month, may not be so productive in later months. In addition, purely technical traders can really struggle to be consistent with this pair, (i.e. by ignoring fundamentals), due to the unique political nature of the United Kingdom. The recent drama surrounding Brexit has added another layer of uncertainty to this currency pair. With a smooth resolution not in the cards for the foreseeable future, it is clear the GBP/USD will be influenced by any developments and negotiations with the European Union.

The GBP/USD is the currency pair encompassing the United Kingdom’s currency, the British pound sterling (symbol £, code GBP), and the dollar of the United States of America (symbol $, code USD). The pair’s rate indicates how many US dollars are needed in order to purchase one British pound. For example, when the GBP/USD is trading at 1.5000, it means 1 pound is equivalent to 1.5 dollars. The GBP/USD is the fourth most traded currency pair on the forex exchange market, giving it ample liquidity and a low spread. Whilst the spreads of currency pairs vary from broker to broker, generally speaking, the GBP/USD often stays within the 1 pip to 3 pip spread range, making it a decent candidate for scalping. The GBP/USD pair, also informally known as “cable” (due to transatlantic cables being used to transmit its exchange rate via telegraph back in the 19th century) has a positive correlation with the EUR/USD, and a negative correlation with the USD/CHF. Trading the GBP/USDWhilst a lot of traders and even brokers will assert that the best time to trade the GBP/USD is during its most active hours during London and New York, doing so can be a double-edged sword due to the often-unpredictable nature of the pair. Its volatility also fluctuates often, and so what could be a profitable looking strategy one month, may not be so productive in later months. In addition, purely technical traders can really struggle to be consistent with this pair, (i.e. by ignoring fundamentals), due to the unique political nature of the United Kingdom. The recent drama surrounding Brexit has added another layer of uncertainty to this currency pair. With a smooth resolution not in the cards for the foreseeable future, it is clear the GBP/USD will be influenced by any developments and negotiations with the European Union.
Read this Term
has been waffling above and below its 100 hour moving average of 1.33742 over the last six or so trading hours. The price has also been staying above the swing lows from January 27 and January 28 between 1.3357 and 1.3373 during that time.

However the last few minutes have seen a move lower to a new session low of 1.33489, and in the process has move below that swing area (yellow area). That has tilted the bias more to the downside. Intraday traders will likely start to use the 100 hour moving average at 1.33742 (and high of swing area) as resistance/risk defining level. Stay below keeps the sellers more in control.

Traders will look toward 1.3339 and then 1.33157 as the next downside targets.

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A.R Chowdhury

A.R Chowdhury

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