The initial jobless claims of over 6 million of course shock the market and it had money heading into the treasury markets. At this point, market participants are very likely to see a lot of noise heading into that number but quite frankly we treasury markets attracting so much money, it’s a natural boost to the greenback. Furthermore, the 61.8% Fibonacci retracement level sits above the 1.25 handle, an area that so far has held true.
GBP/USD Video 03.04.20
To the downside, the market could very easily go to the 1.2250 level, possibly even the 1.20 level after that. I think it is in fact going to be very noisy but all things being equal this is getting ready to get the “next big move” from what I can see. If we break down, then those levels will be targeted. Beyond all of that, there is the “death cross” forms and where the 50 day EMA drops below the 200 day EMA but quite frankly it’s typically a lagging indicator. With all that being said though, there are going to be a lot of negative situations just waiting to happen and the United Kingdom clearly looks like it’s a quite a bit of trouble.
To the upside, if we were to break out then the 1.2750 level looks interesting, but quite frankly I don’t have a lot of faith in that quite yet. The jobs number could change everything, but I wouldn’t hold my breath on that. At this point, it’s all about the coronavirus numbers.
This article was originally posted on FX Empire