The disappointing NFP payroll report sparked a bout of volatility across all markets making it difficult to execute scalping strategies. The GBPUSD reaction was relatively subdued and with a solid support level below and declining daily variation it may offer the best opportunity in the current market environment.
Key Technical Levels
The 38.2% Fibo extension of the 1.3657- 1.7052 rally is a solid support line which may limit downside risks. The level may also present a exit and entry level for traders to target. The GBP/USD isn’t an ideal scalping pair as it has been volatile, but recent price action has held for the most part in the 1.5760-1.600 range. The pair was also relatively quiet following the U.S. NFP report which may lead to an ideal period of low volatility that high frequency traders can exploit.
Quantitative Metrics
The GBP/USD has seen its ATR start to contract again in recent days which could be a sign that the pair is about to settle into a longer term range. However, the widening Bollinger band is a concern and underlines the recent volatility that we have seen from Sterling crosses.
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