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The markets are now closed for the week which makes it a good time to review what happened in the forex market. 👀

Pippo with USD and GBP

Hi! Pippo the Friendly Forex Hippo here! 👋

Using BabyPips.com’s new trading tool, MarketMilk™, let’s take a look at how GBP/USD did this past week. I’ll show you a couple of ways of how I use MarketMilk™ to analyze individual currency pairs. 🔍

Just like there are multiple ways to skin a cat (Eww!), there are multiple ways to analyze currencies with MarketMilk™, I’ll be just going over a few for now because…I don’t have the attention span to write more. 🤡

Let’s begin!

GBP/USD made a slight gain this week.

From GBP/USD’s Overview page, we can see that GBP/USD ended up with some gainz for the week advancing a cute 47 pips or +0.38%. 💪

GBP/USD Weekly Close on 9/14/2019

Price closed this week near the middle of its trading range showing a lack of conviction from both bulls and bears.

Look at the “1 Week High/Low” chart below, you can see that GBP/USD traded down as low as 1.2205 to as high as 1.2413, but closed near the middle at 1.2335. ↔

GBP/USD Trading Ranges for Week Ending 09/14/2019

GBP/USD showing bullish short-term price momentum but longer-term price momentum still really bearish.

Looking at its Price Performance page, while GBP/USD’s 1-week and 1-month returns are positive, showing some short-term bullish price momentum, longer-term (3 months and beyond) returns are all still deep in the negative territory. ↘

GBP/USD Momentum Week Ending 09/14/2019

GBP/USD is neither overbought nor oversold.

According to the proprietary Overbought/Oversold Rating from MarketMilk™, GBP/USD is currently Neutral.

Looking at different technical indicators, all of them are neutral as well. 😱

GBPUSD Overbought/Oversold Rating for Week Ending 09/14/2019

Okay, time for a quick commercial break…

MarketMilk Promo

Done.

GBP/USD is in a bearish trend.

According to the proprietary Trend-Following Rating from MarketMilk™, GBP/USD is currently in a Bearish trend. 🐻

For you trend followers out there, going long right now is probably not a good idea.

GBP/USD Trend-Following Rating for Week Ending 09/14/2019

GBP/USD is trading near a lot of its EMAs which act as dynamic support and resistance levels.

Look at the chart below. The chart measures the distance between price and a specific EMA.

GBPUSD and EMAs for Week Ending 09142019

Each white dot represents the position of the current price relative to an EMA.

If a dot is on the left (red) side, it means that price is below or underneath the EMA.

If the dot is on the right (green) side, it means that price is above the EMA.

For example, the 200 EMA is on the left side. It’s like waaaayy to the left. This means that the price is really far away from the EMA. And since it’s on the left, it means that price is way below the 200 EMA.

Here’s the chart again:

GBPUSD and EMAs for Week Ending 09142019

A simple way to use this chart is to look at how many dots are on the left or on the right.

If all the dots are on the left side, this means that price is below all the EMAs. Which means the trend is strongly bearish.

The more dots on the left, the more bearish the trend.

Same thing for the right side. If all the dots are the right side, this means that price is above all the EMAs. Which means the trend is strongly bullish.

The more dots on the right, the more bullish the trend.

Now, what if the dots are near the middle?

Let’s take a look at the current chart one mo’ time…

GBPUSD and EMAs for Week Ending 09142019

As you can see, the dots for the 5, 10, 20 and 50 EMA are all near the middle (black line).

This means that price is very near the EMA or even right on it!

And what happens when price is near a moving average?

The moving average acts as a dynamic support and resistance level!

If you don’t believe me, here’s an actual price chart of GBP/USD to prove it…

GBPUSD 1D

See how all the EMAs (except the blue 200 EMA) are near the price?

Knowing this lets you know that price is trading near dynamic support and resistance areas.

Since price is underneath most of the EMAs, this could be interpreted as a potential resistance area so it’s just something to watch out for.

The daily volatility of GBP/USD this week was normal.

This week, GBP/USD moved, on average, about 106 pips a day. 〰

Over the past 12 months, GBP/USD’s daily volatility has been around 102 pips, so price fluctuations were nothing out of the ordinary this week. It was pretty bland like my diet. (All I eat is grass.)

You can see all of this volatility goodness on GBP/USD’s Volatility page on MarketMilk™.

Probably the only interesting thing to note is that this past Thursday was the most volatile when it’s usually Tuesdays.

Wait…there is something more interesting…

Prince Harry and Meghan Markle are suing a tabloid.

According to the Guardian, Prince Harry intends to sue the publishers of the Sun and the Daily Mirror over alleged phone hacking. 📱

This probably will not affect the pound.