GBPUSD Pair – The Great British pound (GBP) and the United States dollar (USD) currency pair, also known as “The Cable,” is one of the most widely traded pairs in the forex market.
As of March 31, 2023, the GBPUSD cable pair hit our projected target at 1.24171 without first pulling back to the minor support identified around the 1.21007 price level.
However, with the price close being bearish on the daily timeframe, the pair is likely to trade back to the first demand zone at 1.20975 to find the necessary support to move out of the trading range condition.
GBPUSD Daily Chart Analysis
The daily chart for the GBPUSD pair shows that it is currently ranging between the 1.1800 and 1.24500 levels. The price close on March 31, 2023, was bearish, indicating a potential downside movement.
However, if the levels identified on the daily chart, i.e., 1.20975, 1.19923, and 1.18871, provide the necessary support, then the pair can continue its uptrend seen in the past 18 trading days.
Moreover, the 50-SMA and 200-SMA are currently below the price, which can act as support levels for the price action.
GBPUSD 4-Hour Chart Analysis
On the 4-hour chart, we can see that the resistance level or the supply zone is playing out, and divergence is signaling a potential price reversal.
If the price close below the 1.22989 level and the 50-SMA did not support the price, then we can see it trading to the 1.21084 level.
GBPUSD 1-Hour Chart Analysis
The bias mentioned above is even more apparent on the 1-hour chart, where the price is forming a potential head and shoulder pattern.
The price has already closed below the 1.23576 level, so we expect it to test the 1.22980 level and hopefully break for a move to the 1.20975 level identified on the daily chart.
Impact of Upcoming High-Impact News
There is no high-impact news for the Great British pound in the coming week that can result in high volatility.
However, the US dollar is likely to be volatile considering the expected high-impact news.
- Mon Apr 3
- All Day: OPEC-JMMC Meetings
- 3:00pm USD: ISM Manufacturing PMI (47.5 expected)
- 3:00pm USD: ISM Manufacturing Prices (51.2 expected)
- Tue Apr 4
- 3:00pm USD: JOLTS Job Openings (10.49M expected)
- Wed Apr 5
- 1:15pm USD: ADP Non-Farm Employment Change (208K expected)
- 3:00pm USD: ISM Services PMI (54.5 expected)
- Thu Apr 6
- 1:30pm USD: Unemployment Claims (200K expected)
- Fri Apr 7
- All Day GBP: Bank Holiday
- USD: Average Hourly Earnings m/m (0.3% expected)
- USD: Non-Farm Employment Change (235K expected)
- USD: Unemployment Rate (3.6% expected)
Using MACD Indicator to Analyze GBPUSD Pair
The Moving Average Convergence Divergence (MACD) indicator is a popular and powerful tool used by traders to analyze and identify potential trends in the GBPUSD pair.
The MACD is based on the relationship between two moving averages, typically a 12-period and a 26-period exponential moving average (EMA), and is plotted on a separate chart below the main price chart.
When the MACD line (the 12-period EMA minus the 26-period EMA) crosses above the signal line (a 9-period EMA of the MACD line), it is considered a bullish signal, indicating that the trend is shifting upward.
Conversely, when the MACD line crosses below the signal line, it is considered a bearish signal, indicating that the trend is shifting downward.
Traders can also look for divergences between the MACD indicator and the price action on the GBPUSD pair chart.
Bullish divergences occur when the price makes a lower low while the MACD makes a higher low, indicating that momentum is shifting to the upside.
Bearish divergences occur when the price makes a higher high while the MACD makes a lower high, indicating that momentum is shifting to the downside.
By using the MACD indicator in combination with other technical analysis tools, traders can gain a better understanding of the current market trends and potential future price movements of the GBPUSD pair.
Holding or Folding: Final Thoughts on the Future of GBPUSD
Overall, the GBPUSD technical analysis suggests that the pair is likely to trade back to the first demand zone at 1.20975 to find the necessary support to move out of the trading range condition.
However, if the levels identified on the daily chart do not provide the necessary support, then the possibility of downside movement is inevitable.
The 50-SMA and 200-SMA are currently below the price, which can act as support levels for the price action.
With no high-impact news for the Great British pound in the coming week, the US dollar is likely to be volatile considering expected high-impact news.
The GBPUSD pair requires a cautious approach from traders in the current market conditions. The key to profitable trading is always a thorough analysis of the price action and an understanding of the market fundamentals.
By analyzing the various charts and news, traders can make informed decisions and maximize their profits.
