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Home ANALYSIS

GBPUSD trades to lowest level since November 2020 and tests 1.3000

A.R Chowdhury by A.R Chowdhury
March 14, 2022
Reading Time: 5 mins read
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GBPUSD trades to lowest level since November 2020 and tests 1.3000

GBPUSD

GBPUSD on the daily chart

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
moved to a low price today of 1.3008. That took the price right below a swing level I had pegged at 1.3010, but above the key natural support at 1.3000. The price has since bounced back up to 1.3054 currently. Recall from last week the swing highs stalled near a swing area between 1.3133 and 1.31868. The high just above that level but quickly rotated back to the downside. That area would need to be broken ultimately if the buyers are to take more control.

Ahead of that on the daily chart watch the 1.30808 level. That was the low on March 8 and was also the high price today.

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Taking a look at the hourly chart below, the low price from March 8 and another subsequent swing level up to 1.30878 is actually the next resistance area to get to and through if the buyers are to take more control from the sellers. Also above is the falling 100 hour moving average at 1.31042. Recall from Friday’s trade, that moving average stalled the rally. That hold on Friday, increases the levels importance going forward.

Absent moves above the 1.3080 to 1.30878 and the 100 hour moving average 1.31042 (and moving lower), the sellers are more in control and downside level would look to target levels going back to 2020 from the daily chart and potentially the 50% midpoint of the move up from the March 2020 low at 1.28288 (on the daily chart).

Conversely, moves above those levels on the hourly chart, would give the buyers some hope for further upside probing with 1.3138 followed by the 200 hour moving average 1.31836 as the next upside targets. The swing level between 1.3187 and 1.31945 are also upside targets to get to and through on further upside momentum.

GBPUSD

GBPUSD stays below topside resistance targets
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A.R Chowdhury

A.R Chowdhury

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