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Home ANALYSIS

GBPUSD waffles below the 100 hour MA

A.R Chowdhury by A.R Chowdhury
April 5, 2022
Reading Time: 5 mins read
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GBPUSD

The GBPUSD is trying to stay below its 100 hour MA

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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 trading near unchanged/little higher on the day after a move higher into the European session stalled. The close on Friday was at 1.31127. The current price is trading at 1.3117.

The price action did see a lower open but a climbed back higher into the early European trading hours. The price moved above its 100 hour moving average currently at 1.13229 (blue line in the chart above), but after trading above and below that moving average level for a few hours, the buyers have turned back to sellers. The price has been able to remain below the 100 hour moving average over the last six or so trading hours. Stay below keeps the technical tilt in the direction of the sellers/downside.

On the downside a swing area between 1.3078 and 1.30878 will be targeted. Below that, the lows from last week between 1.3049 and 1.3059 will be eyed.

On a failure of the 100 hour moving average, the downward sloping trendline (see blue numbered circles) on the hourly chart cuts across near 1.3145 (and moving lower). A move above that level, the 50% midpoint of the range since March 11 at 1.3148 and the 200 hour MA at 1.31439 would tilt the bias more in favor of the buyers. The cluster of technical resistance levels up to 1.3148 would be a key barometer for buyers and sellers on more upside momentum today.

For now, the sellers below the 100 hour moving average, remain as the more dominant bias although there is more work to be done..

PS The high to low trading ranges only 54 pips today. The average is 99 pips over the last 22 trading days (around the month of trading). So there is room to roam in either direction on a break to new lows or highs.

PSS The other nuance of note is the price highs have been lower over the last three trading days (thursday, Friday and today). The high from Friday reached 1.3147.

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A.R Chowdhury

A.R Chowdhury

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