Friday, October 23, 2020

The GBP / USD Drop Is Only Temporary, Or Is It Beginning to Make a Fierce Plunge?

 After strengthening since the beginning of this week, the Pound trading began to move slowly towards the end of the week with the main focus still on the Brexit issue.

European Union (EU) Brexit Consultant Michel Barnier has arrived in London to continue talks with his UK counterpart David Frost.

Optimistic expectations for the positive development of the negotiations as well as the extension of the negotiation period have supported the strengthening of the Pound this week.

On the GBP / USD pair price chart, after the price showed a daily spike of up to 240 pips last Wednesday, the Pound traded back slowly showing a bearish return from the 1.31700 high.

The decline was also driven by the strengthening of the US dollar over the weekend with mixed market sentiment awaiting the development of the US economic stimulus package.

Prices have dropped below the Moving Average 50 (MA50) barrier level within the 1 hour time frame of the price movement in the Asian session this morning (Friday).

The price moved slowly at the support level of 1.30600 in the RBS zone (resistance become support) which was the resistance level of the price in the previous week's trading.

A lower decline in prices will be expected to the important level of 1.30000 before further decline will lead to the support zone at 1.29000.

On the other hand, the price surge will see the resistance zone of 1.32000 will be tested again before the higher upside continues.