1.09 0.55%
    1.24 0.71%
    0.68 1.51%
    132.42 -0.28%
    0.63 0.67%
    0.91 -0.26%
    1.34 -0.6%
    144.37 0.26%
    0.88 -0.16%

GBP/USD statistical and technical analysis

BOE Governor Andrew Bailey is speaking in Glasgow today. However, the most important event of the day will be the FOMC Press Conference. The current price of the GBP/USD exchange rate is 1.3655 (November 03, 2021). This pair is still in the important medium-term zone. Therefore, we will now look at statistical and technical analyzes.

Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 0.42% and -0.43% , respectively. The estimated daily return in both directions based on their probability of occurrence is 0.21% and -0.21% . Yesterday´s return was only -0.40% , which is still below the first standard deviation. Our scoring is currently neutral (0 ) for the month-on-month change and -2 for price indexation. This means that the periodic change is in the neutral stage and the indexation is in the declining phase of the cycle. Both scorings range from -3 up to 3 . The development of the estimated cycles based on our analytical systems is shown in the following chart.

GBP/USD daily price indexation Source: WALFIR

Different moving averages (MAs) help us better identify trends across multiple time frames. We use 3 basic MAs to find out which sentiment dominates each horizon. The purple line represents the monthly , the green line the 6 months and the yellow line the annual moving average. According to all MAs, GBP/USD is currently in a bearish sentiment after the exchange rate has fallen below the monthly moving average.

GBP/USD daily price development Source: WALFIR

Since our last analysis, more upward trends have been recorded, although the currency pair is on a declining trend. A maximum of 3 consecutive days was reached. However, downward trends in the same period did not exceed 2 days. The maximum in the measured period is 8 days in the downtrend and 9 days in the uptrend. To estimate Stop Loss orders for our positions, we could use the average long-term ATR (Average True Range) obtained from daily data (0.75% ). The current value is 0.38% , which is below average. Approximately 90% confidence interval (return between -1.0% and 1.0% ) is shown in the histogram below by a red rectangle.

GBP/USD daily return distribution Source: WALFIR

We could use the last decile of low to high returns (1.50% ) to estimate Profit Targets, as shown in the chart below.

GBP/USD daily low to high distribution Source: WALFIR

Basic technical analysis supported short-term bullish sentiment last month. However, the exchange rate was hampered at an important level of resistance at 1.3800 and the long-term moving average. In addition, the divergence between price development and the RSI has recently motivated short-term bears. GBP/USD has also recently approached the demand zone (green rectangle) with a strong bottom, where is the Fibonacci retracement level of 23.60% .

GBP/USD basic technical analysis Source: TradingView

WALFIR Technologies is one of the three divisions of WALFIR s.r.o., which is based in Slovakia. The primary interests of this division are analytical, quantitative, and algorithmic...


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