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Home ANALYSIS

GBPUSD rebounds toward 100 hour MA/swing area

A.R Chowdhury by A.R Chowdhury
March 16, 2022
Reading Time: 4 mins read
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GBPUSD rebounds toward 100 hour MA/swing area

GBPUSD

GBPUSD is moving up to test its 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
is moving toward its falling 100 hour moving average (blue line in the chart above) at 1.30855. That moving average is also within a swing area between 1.3080 and 1.30878. Get above both, would be a step in the bullish direction from a technical perspective.

Recall from Friday, the 100 hour moving average stalled the rally (it was at a higher level as well). Back on last Thursday, the 100 hour moving average was broken, but found resistance sellers near the 1.3186 to 1.31945 swing area, and was also well short of the 200 hour moving average (green line).

The 200 hour moving average is currently at 1.31467 and falling. It would be another key target to get to and through on further upside momentum. The price last traded above the 200 hour moving average back on February 23 when the moving average was at 1.3576. The price low today reached 1.2999 (call it 1.3000). That low is a nice round number to form a bottom, and a full 576 pips from that broken 200 hour moving average level back on February 23.

Is it time to probe the upside?

Get and stay above its 100 hour moving average and the buyers can feel more confident for a move toward the 200 hour moving average and then see what happens there.

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A.R Chowdhury

A.R Chowdhury

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