Figure 3: The GBPUSD on a daily chart
The key levels of support and resistance are as follows:
Resistance 1 is at the level of 1.2250-1.2300.
Resistance 2 is in the zone 1.2410 - 1.2470. At the same time, it is near 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, there is the bottom edge of the hidden 123 gap that formed on the candlestick on March 26, 2020.
Support 2 is in the range around level 1.1400 - 1.1470.
Additionally to that, we present the overall sentiment of the market, which according to the report COT (Commitment of Traders), which is presented every Friday, brings the following information:
||Data as at 22/5/2020
||Data as at 15/5/2020
||Data as at 8/5/2020
||Data as at 1/5/2020
||Data as at
||- 12 000
|| 16 500
Last week, big speculators again reduced their overall net position in the British pound. This is the eleventh drop in a row, so bearish sentiment prevails in the pound
. Speculators, on the other hand, strengthened their overall net position in the US dollar again for the ninth 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?
This week should be quieter for the pound, as there is no significant economic data to be released in the UK. Only on Friday there will be published data on consumer confidence and the development of the price index of sold real estate. Therefore, the GBPUSD currency pair will be more affected by data coming from the USA (on Tuesday - data on consumer confidence in May and sales of new homes in April, on Thursday - GDP and claims for unemployment insurance).
In addition, further developments of the coronavirus disease and the measures taken in this regard need to be monitored on an ongoing basis.
Open an Account and Trade GPB With Us!
Your capital is at risk.