Tag: GBPUSD

After some initial volatility to start the new trading week, the $GBPUSD has found support around the 50% Fibonacci level of the rally over the past 2 weeks. U.S. dollar weakness is starting to take hold as the market looks at all of the uncertainty brooding for the U.S. Between the election, the lack of a 2nd covid relief bill and the subtle breakouts of a coronavirus second wave across the country, the market has started to dump the safe haven currency.

It is important to note that the 1.30 major support level is just below that 50% Fibonacci level. That level is lending some extra support to $GBPUSD bulls. If cable can continue to hold above these 2 levels, it looks like this rally continues higher towards 1.3250.

However, the event risk to consider for this pair this week includes the release of US GDP, US personal spending & personal income and US consumer confidence. And, of course, Brexit headlines continue to spook markets as unscheduled surprise events.

---

If you are interested in learning how to do fundamental analysis and find levels in your trading, please check out the CHARTS101 course. Read the charts for yourself so you can trade what you see and not what I think.

I have been harping on USD weakness for months now (here and here and here). Amazingly, during that time with poor U.S. economic data releases and stocks recovering, the USD has remained rangebound. Bouts of weakness have been met with strong bouts of buying since April. When looking at the $GBPUSD, the 1.2634 resistance level has remained that line in the sand for buyers and sellers. Until we get a break above 1.2634 that stays above the 1.2775 resistance level, we won’t see sustainable selloff in the USD.

Despite the jockeying between buyers and sellers, the $GBPUSD is trending higher with higher lows and higher highs. This indicates that the USD does continue to weaken more and more. A hold above the 1.2775 resistance level will see the $GBPUSD head towards the highs on the daily chart above the big 1.3000 level. However, another false break above 1.2634 could send $GBPUSD back into a correction that targets the 50% Fibonacci level at 1.2114 or lower.

---

If you are interested in learning how to find and use these levels in your trading, please check out the CHARTS101 course. Read the charts for yourself so you can trade what you see and not what I think.

With everything the Fed has done to loosen monetary policy, the USD should be far lower. But the reserve currency is in high demand during this time of disease and civil unrest. Though it will be a back and forth, tug of war, I still believe that the USD weakens in the face of unprecedented expansion of the Federal Reserve balance sheet.

This is a short-term view of Tuesday’s price action in the $GBPUSD. After bottoming below the 1.25 level, cable managed to rally over 200 pips before topping out at 1.2688. Upon Powell’s testimony during the U.S. session, the USD rallied as traders dialed down their risk appetite with price finding support in the Fibonacci levels.

Well, this is where $GBPUSD stands just a day later:

The break below the 61.8% Fibonacci retracement level is a signal for a move lower. But that will be highly dependent on how the market reacts to the Bank of England monetary policy decision tomorrow morning.

---

If you are interested in learning how to find and use these levels in your trading, please check out the CHARTS101 course. Read the charts for yourself so you can trade what you see and not what I think.