GBP/USD in 400 Pip Range!

GBP/USD in 400 Pip Range!

GBP/USD is during a 400-pip range today and up 2.5% because the Bank of England held their scheduled monetary policy meeting earlier today and left rates unchanged at 0.1%, needless to say . This meeting comes only days after the BOE had two emergency rate cuts and slashed rates to its lowest rate ever. The BOE in recent days also began a 200 billion Pound Quantitative Easing program and said they're able to do more if necessary. the good British pound continued its bid on the ecu open from yesterday’s intraday low of near 1.1650. additionally , the US Dollar has been getting pummeled all day, down 1.5%, pushing the GBP higher vs the US Dollar.

On March 9th, GBP/USD put during a high of 1.3200 and commenced trading lower because it seemed Boris Johnson wasn't yet 100% able to affect the coronavirus pandemic. Also, at that point , the US Dollar became a flight to safety as stock markets round the world began to selloff and move towards market territory. On March 20th, the pair call at a coffee of 1.1410 because the BOE cut rates to 0.1% and therefore the DXY was topping. On the chart below, rock bottom portion shows the correlation between the GBP and therefore the DXY. Before GBP/USD peaked on February 20th, the pair broke its normal behavior and therefore the correlation was positive. Once price peaked, the coefficient of correlation stated moving lower and is currently at -0.97, meaning that the GBP and therefore the USD move are currently occupation opposite directions 97% of the time!

Today’s move in GBP/USD was monstrous. Price broke higher through an outsized resistance band between 1.1860 and 1.2000. additionally , the pair broke through the 38.2% Fibonacci retracement level from the highs on February 20th to the lows on March 9th near 1.2093. there's strong horizontal resistance just above today’s highs near 1.2200. Above there's alittle band of intraday resistance and therefore the 50% retracement level from an equivalent period of time between 1.2275 and 1.2305. subsequent resistance level is almost 200 pips higher at the 61.8% Fibonacci retracement level near 1.2516.

As for support, there really isn’t much until the psychological round number at 1.2000. Below that's the previous band of resistance between right down to 1.1860. there's also horizontal support near 1.1640. the ultimate price is that the low from March 20th at 1.1410.

If traders dare to enter a GBP/USD position, be ready for volatility and a few massive moves. confirm to observe for sudden changes within the DXY also , as these two currencies are almost perfectly negatively correlated. A change within the direction of the DXY could mean a change in direction for the GBP/USD!