In the world of forex trading, understanding fundamental analysis is key to making informed investment decisions. Let’s break down what this means using a recent example:
During Asian trading hours, the British Pound (GBP) depreciated against the US Dollar (USD), hovering around the 1.2800 level. This movement in the GBPUSD currency pair was influenced by various factors, notably economic data releases and market sentiment.
In this case, the United Kingdom didn’t have any significant economic reports scheduled for release on this particular day. However, the previous day saw the United States publishing Producer Price Index (PPI) data that surpassed expectations. This unexpected uptick in PPI numbers strengthened the US Dollar, causing the GBPUSD pair to decline.
For investors, understanding the impact of economic data releases and events on currency pairs is crucial. By staying informed about key economic indicators like PPI, GDP, inflation rates, and employment data, traders can anticipate market movements and potentially capitalize on profitable opportunities.
In this scenario, traders who were aware of the higher-than-expected PPI numbers from the US could have taken advantage of the GBP’s decline against the USD. By selling GBPUSD positions at the right time, investors could have potentially profited from the subsequent downtrend in the currency pair.
Technical analysis
Time Frame: 1 hour
GBPUSD Support & Resistance Table – 15/03/2024
| Support & Resistance | Level | Explanation |
| Resistance 2 | 1.2788 | Daily R2 |
| Resistance 1 | 1.2766 | Daily R1 |
| Support 1 | 1.2708 | Daily S1 |
| Support 2 | 1.2686 | Daily S2 |
GBPUSD Indicator Table – 15/03/2024
| Indicator | Signal |
| SMA 20 | Sell |
| SMA 50 | Sell |
| SMA 100 | Buy |
| MACD( 12;26;9) | Neutral |
| RSI (14) | Sell |
| Stochastic ( 9;6;3) | Sell |
GBPUSD Indicator / Period Table – 15/03/2024
| Indicator / Period | Day – Sell | Week – Buy | Month – Buy |
| MACD( 12;26;9) | Neutral | Buy | Sell |
| RSI (14) | Sell | Buy | Neutral |
| SMA 20 | Sell | Buy | Buy |
GBPUSD 15/03/2024 – Reference Price : 1.2736
| SELL | Simple Moving AverageBuy (1)Sell (2)Technical Indicators – OscillatorsBuy (0)Sell (2) |
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