Figure 2: The GBPUSD on a daily chart
The key levels of support and resistance are as follows:
Resistance 1 is at the level of 1.2170-1.2230.
Resistance 2 is in the zone 1.2410 - 1.2476. At the same time, it is EMA 50 moving average around which the price has recently fluctuated.
Resistance 3 is in the range of 1.2620 - 1.2650.
Support 1 is located in the range of 1.1980 - 1.2000. Here is the bottom edge of the hidden gap formed on the candlestick on March 26, 2020.
Support 2 is in the range around level 1.1400 - 1.1470.
Additionally, we present the overall sentiment of the market according to the report COT (Commitment of Traders), which is presented every Friday and which brings the following information:
||Data as at 15/5/2020
||Data as at 8/5/2020
||Data as at 1/5/2020
||Data as at
|Data as at
Last week, big speculators again reduced their overall net position on the British pound. This is the tenth decline in a row, so the bearish sentiment prevails on the pound. Speculators, on the other hand, strengthened their overall net position on the US dollar again for the eighth week in a row, which, despite poor macroeconomic data in the US, confirms that the dollar serves as a strong reserve currency in times of crisis.
What awaits us this week?
From macroeconomic data, Britain will report important labor market data on Tuesday. On Wednesday, a set of data on inflation will be released and on Thursday, information on the further development of the PMI Purchasing Managers' Index will be published. On Friday, the results of retail sales for April will be reported, where a sharp decline is generally expected, which can already be priced in the value of the pound.
In addition, further developments in the spread of the coronavirus disease and the measures taken in this regard need to be monitored on an ongoing basis.
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