This is my analysis on GBPUSD price movement as at 22/04/2020. Still learning the ropes of forex, so please do forgive me for any mistakes.
Currently GBPUSD is at a downchannel, with a flag formation made prior to this. A small break downwards in the flag formation has been seen, but GBPUSD is still within a larger flag formation. With the confirmation of a break downwards in this larger flag formation, GBPUSD will most likely trend downwards.
In this period, GBPUSD may retrace upwards within the flag formation, which would still be within analysis. There are possible entries within this time period, but as always, risk management will be critical.
In addition, with the coronavirus crisis, UK economy will be greatly weakened as compared to US. Although US may see a greater impact due to the coronavirus, US is still an economy powerhouse and USD will be in great demand. As USD is also deemed as a safe haven, the demand for USD outweighs the demand of GBP. With Brexit uncertainties, GBP's value and demand will also be greatly weakened. As such, fundamentally, I believe that USD will strengthen while GBP weakens in this short time period. Even in a recession, USD tends to do better as USD ranks higher in terms of safe haven currencies.
As such, my current bias towards GBPUSD will be bearish.
If you disagree or have a different opinion to my analysis, please do comment below or even text me @ telegram. I would gladly accept any comments.
Telegram @ ryxn0
Currently GBPUSD is at a downchannel, with a flag formation made prior to this. A small break downwards in the flag formation has been seen, but GBPUSD is still within a larger flag formation. With the confirmation of a break downwards in this larger flag formation, GBPUSD will most likely trend downwards.
In this period, GBPUSD may retrace upwards within the flag formation, which would still be within analysis. There are possible entries within this time period, but as always, risk management will be critical.
In addition, with the coronavirus crisis, UK economy will be greatly weakened as compared to US. Although US may see a greater impact due to the coronavirus, US is still an economy powerhouse and USD will be in great demand. As USD is also deemed as a safe haven, the demand for USD outweighs the demand of GBP. With Brexit uncertainties, GBP's value and demand will also be greatly weakened. As such, fundamentally, I believe that USD will strengthen while GBP weakens in this short time period. Even in a recession, USD tends to do better as USD ranks higher in terms of safe haven currencies.
As such, my current bias towards GBPUSD will be bearish.
If you disagree or have a different opinion to my analysis, please do comment below or even text me @ telegram. I would gladly accept any comments.
Telegram @ ryxn0