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Forecast for GBP/USD on Mar 12, 2020
GBP/USD
The Bank of England lowered its key rate from 0.75% to 0.25% on Wednesday. The pound’s initial reaction was to fall by 100 points, but then there was an increase of 150 points, and the day was closed with a loss of 65 points. Volatility in the markets has returned, but the overall trend for strengthening the dollar remains, because the situation in the British economy is significantly deteriorating; according to the latest data, GDP for January showed 0.0%, the trade balance deteriorated from -1.4 billion pounds to -3.7 billion, industrial production decreased by 0.1%, production in the construction sector showed -0.8% in January.
On the daily scale chart, the surge in growth was stopped by the balance line (red indicator line), meaning that volatility remained within the downward trend. The signal line of the Marlin oscillator is fixed in the decreasing trend zone. Now the target of the pound is the 110.0% Fibonacci level at 1.2647. Overcoming the level opens the second target for the reaction level of 123.6% at the price of 1.2538.
On the H4 chart, the price is fixed under the balance line and the MACD line, the Marlin is declining and does not show signs of a reversal. We are waiting for the British pound to fall to the designated goals.
The material has been provided by InstaForex Company – www.instaforex.com
