GBP/USD – 1H.
Hello, traders! According to the hourly chart, a strong drop in quotes continues. The GBP/USD pair resumed the process of falling during yesterday’s day and completed consolidation under the corrective levels of 261.8% (1.1958) and 323.6% (1.1665). Thus, today the fall in quotes can be continued in the direction of the next Fibo level of 423.6% (1.1193). The downward trend corridor, which has a fairly strong tilt angle, failed to keep the pair’s quotes inside itself yesterday. The fall of the pound was so strong that the pair went beyond the descending corridor. Only fixing the exchange rate of the pound/dollar pair above the corrective level of 323.6% will give a small chance of some growth.
GBP/USD – 4H.
As seen on the 4-hour chart, I removed the grid of Fibo levels, since it is identical to the grid on the hourly chart. There are no new trading ideas at the moment, as there are no special changes in the pair’s movement. Quotes of the British dollar just continue to fall from day to day, and yesterday they broke all records of activity. New emerging divergences are not observed in any indicator at the moment.
GBP/USD – Daily.
As seen on the daily chart, the graphic picture is still the most interesting. During yesterday’s day, the next target level was fulfilled – the Fibo level of 127.2% (1.1538). The total fall of the pair over the past 7 days is 1500 points. Absolutely fantastic figures, given the fact that the main reason for the fall of the pound is also the COVID-2019 virus. But despite the fact that it is found in the US, UK, and EU, it is the dollar that is growing. The euro is falling more or less moderately, and the pound is simply collapsing. All this is characteristic of panic and shock. After all, it is now impossible to explain why the pound has fallen by 15 cents in seven days. While the crisis and recession threaten the entire world. A rebound of the pair’s quotes from the Fibo level of 127.2% will allow traders to count on a reversal in favor of the pound and some growth in the direction of the corrective level of 100.0% (1.1959).
Overview of fundamentals:
On Wednesday, no important economic reports were received from the UK and the US. And what do they matter now with such movements in the market?
The economic calendar for the US and the UK:
On March 19, important economic reports and events are not included in the calendar of the UK and the US.
The key place among all the news is still occupied by news about the coronavirus. There is still some good news. In the Chinese province of Wuhan, which is a hotbed of infection, no new cases of the disease were recorded over the past day. And in all of China, there were 10 new cases. However, this is in China. In the UK and the US, the number of cases continues to grow.
COT report (Commitments of Traders):
The latest COT report showed minor changes in the volume of long and short positions. The next report will be released tomorrow, but I believe that it will not contain much useful information for traders. First, because in the last three days after the official date of the report (March 17), the pound has gone down more than 700 points. Accordingly, the volume of contracts among all major market players has changed significantly. Secondly, traders are now in a state of shock, so the market can move anywhere.
Forecast for GBP/USD and recommendations to traders:
I believe that in the current conditions, opening any transactions is still associated with high risks, as the market remains in a state of shock. On the hourly and 4-hour charts, I don’t expect any signals at all. On the daily chart, the level of 127.2% (1.1538) can be used to get a signal about a breakout or closing below it. The goal of the next Fibo levels.
Terms:
“Non-commercial” – major market players: banks, hedge funds, investment funds, private, large investors.
“Commercial” – commercial enterprises, firms, banks, corporations, companies that buy currency to ensure current activities or export-import operations.
“Non-reportable positions” – small traders who do not have a significant impact on the price.
The material has been provided by InstaForex Company – www.instaforex.com
Disclaimer: Please note all prices are for information only, they should not be relied upon for accuracy or trading. All prices quotes are based on CFD prices and are similar though not always identical to real exchange prices. STOCKTRKR or anybody connected with STOCKTRKR will not accept any liability for loss or damage arising from use of any information/commentary/charts or articles which is provided 'as is' for educational purposes only, nothing contained on this website should be considered as investment advice - please seek proper investment advice from registered financial broker or institution if you wish to trade on global markets and ensure you are familiar with the risks.
