Technical Analysis for GBPUSD

<p><em>The chaos of the 2008 crisis, that began with the fall of Lehman Brothers, is similar to the current pandemic crisis. Many financial market traders who still have strong memories of unprecedented trading losses in one day and this tide of uncertainty are pushing for a flight to  safety.</em></p>
<p>Although the number of  new coronavirus infected cases in the UK and US is still increasing, the financial markets have temporarily stopped pricing in the economic impact of the pandemic, as Pound has returned to trading prices in the range of 1.2150-1.2500 against the US Dollar. As it was a long holiday weekend, the <strong>USA500’s</strong> main equity index has now rallied more than 9% so far this month and <strong>UK100</strong> has bounced back from the red and is showing some signs of recovery.<span lang="id"><a href="https://analysis.hotforex.com/wp-content/uploads/2020/04/us500.jpg"><img class="size-large wp-image-122538 aligncenter" src="https://analysis.hotforex.com/wp-content/uploads/2020/04/us500-1024×439.jpg" alt="" width="696" height="298" srcset="/wp-content/uploads/2020/04/us500-1024×439.jpg 1024w, /wp-content/uploads/2020/04/us500-300×129.jpg 300w, /wp-content/uploads/2020/04/us500-768×329.jpg 768w, /wp-content/uploads/2020/04/us500-696×298.jpg 696w, /wp-content/uploads/2020/04/us500-1068×458.jpg 1068w, /wp-content/uploads/2020/04/us500-980×420.jpg 980w, /wp-content/uploads/2020/04/us500.jpg 1360w" sizes="(max-width: 696px) 100vw, 696px" />US500 &amp; UK100 (Daily)</a></span></p>
<p>Historic reactions from the government and the BoE working together to try to secure employment, guarantees for loans to small businesses and interest rates cut to a low of 0.1%. And in the US too, the additional $2.3 trillion aid package is unprecedented , providing loans and subsidies for American households, financial support for businesses affected by the pandemic and cutting interest rates to near zero.</p>
<p>During times of uncertainty, the USD is seen as a safe-haven currency with strong demand. Conversely, a few months after Brexit and with trade agreements pending, the Pound oscillates, becoming a risky asset.</p>
<p>Starting March 9, the <strong>GBPUSD</strong> pair has traded in a very extraordinary range approaching 18 cents (1,790 pips) from the peak price to the valley. The peak price was <strong>1.3199</strong> on March 9 and fell to <strong>1.1409</strong> in just the next ten days, while the USD posted its strongest value in <strong>more than 30 years</strong> against Sterling. This volatility was triggered by the financial market panic against Covid-19 which began to spread throughout the world.</p>
<p><a href="https://analysis.hotforex.com/wp-content/uploads/2020/04/GBPUSD.jpg"><img class="size-large wp-image-122548 aligncenter" src="https://analysis.hotforex.com/wp-content/uploads/2020/04/GBPUSD-1024×461.jpg" alt="" width="696" height="313" srcset="/wp-content/uploads/2020/04/GBPUSD-1024×461.jpg 1024w, /wp-content/uploads/2020/04/GBPUSD-300×135.jpg 300w, /wp-content/uploads/2020/04/GBPUSD-768×346.jpg 768w, /wp-content/uploads/2020/04/GBPUSD-696×313.jpg 696w, /wp-content/uploads/2020/04/GBPUSD-1068×481.jpg 1068w, /wp-content/uploads/2020/04/GBPUSD-933×420.jpg 933w, /wp-content/uploads/2020/04/GBPUSD.jpg 1366w" sizes="(max-width: 696px) 100vw, 696px" />GBPUSD, H4.</a></p>
<p>After rising at the end of March, the GBPUSD pair has been consolidating for 2 full weeks in the transaction range of 1.2150 – 1.2500, around the 61.8% Fib. level. In a 4-hour period, the 200-SMA became a dynamic Resistance holding the rate of GBPUSD up, only a few points below the 1.2500 key level. Last week it closed lower at 1.2445 and stuck to the ascending trendline. During the 2-week consolidation period, the RSI indication showed a break below the overbought level at 58.56, and while we cannot expect much during the consolidation period for the MACD to measure price movements, the histogram is still above the neutral zone, but shows lack of momentum.</p>
<p><a href="https://analysis.hotforex.com/wp-content/uploads/2020/04/GBPUSD-1.jpg"><img class=" wp-image-122558 alignleft" src="https://analysis.hotforex.com/wp-content/uploads/2020/04/GBPUSD-1.jpg" alt="" width="363" height="288" srcset="/wp-content/uploads/2020/04/GBPUSD-1.jpg 652w, /wp-content/uploads/2020/04/GBPUSD-1-300×238.jpg 300w, /wp-content/uploads/2020/04/GBPUSD-1-529×420.jpg 529w" sizes="(max-width: 363px) 100vw, 363px" /></a></p>
<p>Given the Easter holiday period, the markets are not very active, and the movement earlier this week may not have significant volatility. The pair still tends to remain in the range of bound prices. On the 1-hour chart, the price started declining at the close of 1.2445, but has not given a strong indication. The temporary Support levels are at the price of 1.2400; 1,2365; 1.2325 with upside barriers at the price of 1.2500; 1.2575 and 1.2625.</p>
<p>The British Pound could have followed the previous advance, as it made cautious positive progress  against the US Dollar this week. If GBPUSD pushes above 1.2500, it could expose previous lows from early March and could retest Resistance levels 1.2575 to 1.2625. Otherwise, a pullback could turn attention on the immediate 1.2440 Support level, as investors consider the possibility of a reversal.</p>
<p><strong>Ady Phangestu</strong></p>
<p><strong>Market Analyst – HF Educational Office – Indonesia</strong></p>
<p><strong>Disclaimer: </strong>This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.</p>