TriumphFX Forex Analysis – GBP Pairs – April & May 2020

EURGBP – Daily and 4 Hour Charts

As suggested in our last EUR analysis, the EURGBP closed above the tight range resistance area and was then bullish.

Price is now moving in a much wider range on the weekly time-frame (0.8300-0.9320). The daily moving averages confirm the market indecision – they have been crossing frequently. EURGBP on the 4 hour time-frame has been bearish but is also showing signs of indecision.

Trading opportunities could exist around the support and resistance areas of the weekly range and if price closes out of the range. Trading opportunities could also exist around the horizontal levels at 0.8535, 0.8845, 0.9085, 0.9360 and 0.9470.

The European Central Bank (ECB) continue to keep rates at the record low of 0.00%. Rates have not been cut into negative territory, despite the COVID-19 outbreak. Instead, the ECB has launched an asset buying program. Due to weak trade growth and economic forecasts, rates are likely to stay low for the foreseeable future. The COVID-19 pandemic is just another economic challenge for the Euro zone.

The Bank of England (BOE) has followed other central banks and has cut rates to combat economic challenges caused by the COVID-19 pandemic. The UK interest rate is now set at 0.10% (a historic low). The UK has now left the EU, meaning that Brexit uncertainty should weigh less heavily on the Pound.

GBPAUD – Daily and 4 Hour Charts

As suggested in our last GBP analysis, price has continued to find support around the trend support area and move higher.

GBPAUD is clearly up-trending on the daily time-frame and has been finding support around the trend support area. Price is currently in a retrace move. The daily moving averages are bullish and steady, signalling that the upside momentum could continue. On the 4 hour time-frame, GBPAUD is looking indecisive and has been moving sideways. The moving averages confirm the market indecision – they are also moving sideways and are tightening.

Opportunities to go long may exist around the daily trend support area, around the dynamic support of the daily moving averages and around the horizontal levels at 1.9540, 1.9450, 1.9315, 1.9185, 1.8665 and 1.8565. A bullish move could find resistance and even reverse around the 4 hour moving averages and around the horizontal resistance levels at 2.0435, 2.0475 and 2.0690.

The Reserve Bank of Australia (RBA) cut rates again in their April 2020 meeting. Rates were cut by a further 0.25%, bringing the official bank rate to 0.25% (a record low). Rates have since stayed the same. The current low rate is needed to help reduce the unemployment rate and stimulate the economy due to COVID-19 recession fears. The RBA will continue to monitor the labour market and inflation. Rates will not be raised until targets are met.

The Bank of England (BOE) has followed other central banks and has cut rates to combat economic challenges caused by the COVID-19 pandemic. The UK interest rate is now set at 0.10% (a historic low). The UK has now left the EU, meaning that Brexit uncertainty should weigh less heavily on the Pound.

GBPCAD – Daily and 4 Hour Charts

The daily time-frame is showing clear market indecision – price is choppy and moving sideways. The daily and 4 hourly moving averages are also moving sideways and have been crossing frequently – confirming the market indecision. GBPCAD is ranging between 1.6600 and 1.7850. Price is also looking indecisive on the 4 hour time-frame.

Trading opportunities could exist around the support and resistance areas of the range and if GBPCAD moves out of the range (break-out trade). A break to the downside may find support around the horizontal support levels 1.6225 and 1.5885. Trading opportunities could also exist around the 4 hour horizontal levels at 1.7625 and 1.7240.

The Bank of England (BOE) has followed other central banks and has cut rates to combat economic challenges caused by the COVID-19 pandemic. The UK interest rate is now set at 0.10% (a historic low). The UK has now left the EU, meaning that Brexit uncertainty should weigh less heavily on the Pound.

The Bank of Canada (BOC) followed the US by slashing it’s benchmark interest rate. The intent of the rate cut is to help boost the economy during the COVID-19 pandemic. The current rate is now 0.25%. The economy is currently performing well and inflation targets are currently at their potential. If coronavirus fears deescalate, the BOC could increase rates again in the near future.

GBPJPY – Daily and 4 Hour Charts

Price is indecisive and is lacking clear trend direction. The moving averages on both time-frames confirm this – they are tight and have been crossing frequently. GBPJPY has formed a daily range at 125.80-148.30. The 4 hour has also formed a range at 132.35-135.35.

Trading opportunities may exist around the support and resistance areas of both ranges and if price moves out of either range (break-out trade).

The Bank of England (BOE) has followed other central banks and has cut rates to combat economic challenges caused by the COVID-19 pandemic. The UK interest rate is now set at 0.10% (a historic low). The UK has now left the EU, meaning that Brexit uncertainty should weigh less heavily on the Pound.

The Bank of Japan (BOJ) continues to keep interest rates at the record low of -0.10%. The Japanese economy is performing well and showing signs of expansion. COVID-19 recession fears could stunt economic growth though.

GBPUSD – Daily and 4 Hour Charts 

As suggested in our last GBP analysis, the GBPUSD broke lower and was bearish.

Price has since been retracing the sell-off and is starting to look indecisive on the daily time-frame. The daily moving averages confirm the market indecision – they have been crossing frequently and are moving sideways. Price action has formed a bearish trend resistance on the daily time-frame, suggesting that the GBPUSD may attempt a bearish move. The 4 hour time-frame is also looking indecisive.

Trading opportunities could exist around the 4 hour and daily moving averages, around the daily trend resistance area and around any of the identified horizontal levels at 1.1490, 1.2015, 1.2210, 1.2625, 1.2760, 1.3185 and 1.3465.

The Federal Reserve has announced a record breaking stimulus package, aimed at US households and employers. The US Federal Open Market Committee (FOMC) has unexpectedly cut rates by 150 points due to heightened concerns regarding the COVID-19 outbreak. The current Fed Funds rate is currently 0.25%, back at post-2008 levels. There is some concern that keeping rates low could cause greater issues in the US’ financial sector. The USD has been acting as a safe haven amid the COVID-19 outbreak. There are some concerns that the COVID-19 pandemic may hit the US hardest, causing a reversal of the recent USD strength.

The Bank of England (BOE) has followed other central banks and has cut rates to combat economic challenges caused by the COVID-19 pandemic. The UK interest rate is now set at 0.10% (a historic low). The UK has now left the EU, meaning that Brexit uncertainty should weigh less heavily on the Pound.

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