GBPUSD WEEKLY ANALYSIS – MARKET UNCERTAINTIES CAUSING THIN TRADING IN GBPUSD

GBPUSD WEEKLY ANALYSIS – MARKET UNCERTAINTIES CAUSING THIN
TRADING IN GBPUSD  

Following the last report on GBP/USD, the pair extended its gains
after successfully breaking above previous resistance level near 1.2300. As the
pair continues its rally and trimming previous losses, recent candlestick
pattern may suggest short-term consolidation between resistance 1.2600 and
support 1.2300. 

In terms of MACD, although in clear bullish expansion, recent thin
trading after Monday’s breakout is causing the slowdown in its momentum. In
terms of the EMA, price action is now trading between both the 20EMA and 50EMA.
As both indicators are lagging indicators and lack of clear signals from recent
price action, the market would consolidate in near the term until a clear trend
appears for investors to jump in.  

From the fundamental point of view, the dollar index remains the
main driver for most of the major currency pairs’ movement. With countries
across the world battling against the COVID-19 pandemic that has profoundly
impacted the global economy, investors are all in ‘sit-and-wait’ mode while
being afraid of high uncertainties.

In the UK, the total number of cases now stands at 33,718 as of
writing, placing the country as the 8th most affected in the world. Efforts
taken by the state to support its economic downfall was last month’s £30 billion
stimuli from the government and interest rate cuts to a record-low of 0.25%.

With a lack of sentiment from the country itself, overall market
sentiment is being focused on the dollar. Investors are jumping into different
markets, specifically in-and-out of the DXY, due to the uncertainties in the
market as they seek to gain even the slightest profit during this hardship. One
primary driver for the FX market would be US jobs data due later today, where
most investors would refer it to gauge market sentiment for the weeks
ahead.      

As everyone is struggling with the COVID-19 pandemic, Regain Capital
wishes to remind all to wash your hands continually, keep social distancing,
drink a sufficient amount of water, and stay safe!