GBP/USD
A significant and technically most important event occurred yesterday, on Wednesday - the pound, having fallen by 474 points(!), fell below the low of September 3, 2019 (1.1958), which is the lowest of the new history of the British currency. The quote was lower in the mid-80s (the period of the old history), after the British currency was released into "free float" in 1979. Later, in 1985, the US, Great Britain, Germany, Japan and France adopted the Plaza agreement (hotel in New York) to correct imbalances in world trade, which involves central bank interventions, which has unfolded a number of currencies.
Empirically, in technical analysis, it is believed that the price overcoming key levels before the release of important economic news, can predict the nature of this news. So, we believe that the measures that the Bank of England will take today will not be enough to fix the situation , and in the future, not without the impact of the coronavirus epidemic, the trade agreement between the EU and the UK will not take place, there will be a hard Brexit and the pound will continue to fall for a long time.
The reason behind the pound's decline yesterday was the closure of schools due to coronavirus. The fall stopped exactly at the Fibonacci reaction level of 261.8%. Respectively, we continue to focus on determining further goals for this instrument. The nearest target is the 271.0% level at the price of 1.1375. Consolidating the price below it opens the second target at the Fibonacci level of 314.0% at the price of 1.1035. The third objective is the support of the embedded line of the price channel in the vicinity of 1.0820.
There are no reversal and correction signs on the four-hour chart on the Marlin oscillator, we are waiting for the British pound to fall further.
The material has been provided by InstaForex Company - www.instaforex.com