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Home ANALYSIS

GBPUSD trade between swing area on the daily chart

A.R Chowdhury by A.R Chowdhury
March 9, 2022
Reading Time: 5 mins read
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GBPUSD trade between swing area on the daily chart

GBPUSD

GBPUSD trades back within the swing area on the daily chart

The technical story on 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 shifting a little more with the buyers trying to take back some control.

Recall from yesterday (see post here), the pair fell below a swing area between 1.3133 and 1.31858. The price closed below that swing area for two days, but has returned back into that area on the corrective move higher today.

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So far, however, the price has remained below the upper extreme (at 1.31858). The high price has reach 1.31799.

The good news for the dip buyers is that the low price off of that high has also remained above the lower extreme at 1.3133. The low price reached 1.31362 and has bounced modestly to the current level 1.3168.

So the price is within its own traders purgatory with buyers and sellers battling it out within the daily swing area.

Drilling to the hourly chart below, should the price move above 1.31858, it would next have to extend above the falling 100 hour moving average at 1.31961.

The price last traded above that 100 hour moving average on Thursday of last week, but the attempt to extend above that level ultimately gave way.

That break back below the moving average on Thursday has led to the four day’s of declines into today. That move saw the price move from the 100 hour MA level at 1.3373 level down to the low yesterday of 1.30808.

Going forward, get above the 100 hour moving average and the bias gets a little bit more bright for the buyers (as long as the price can stay above that moving average level).

GBPUSD

GBPUSD on the hourly chart
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A.R Chowdhury

A.R Chowdhury

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