Tuesday, October 20, 2020

Instant Up, Instant Down, Trader ‘Shrink’ With GBP / USD Movement?

 As of last week, Pound trading earlier this week still left investors uneasy with aggressive movements on the price chart.

As early as the Asian session began, the Pound has shown an uptrend with further strengthening on display in continued trading in the European session yesterday.

Investors have expressed confidence that the European Union (EU) and the United Kingdom (UK) will reach an agreement to end the 5-year-long Brexit drama.

However, the depreciation of the Pound in the New York session came amid concerns for investors after the UK stated that there was no further interest in continuing negotiations if there was no change in approach from the EU.

Further developments will continue to be monitored to get a clearer signal of the direction of the Brexit negotiations.

On the price chart for the GBP / USD pair, the price has shown an increase as soon as the Asian session started yesterday past the Moving Average 50 (MA50) barrier level on the movement in the 1 hour time frame.

A higher jump was exhibited in the European session with a daily rise recorded around 130 pips reaching the high of 1.30200.

However, the price dropped again below the level of 1.30000 and closed trading around the level of 1.29400 above the support level of MA50.

If the rise continues, the level of 1.30000 will be tested again and if the price manages to pass that level, last week's resistance level around 1.30800 will be the destination of the next rise.

On the other hand, if the price declines, the RBS zone (resistance become support) in the price range of 1.29000-1.28500 will return to the price.

A lower decline beyond the zone is seen to lead to the support zone at the level of 1.27600.