GBPUSD
This week could be a volatile week for the Great Britain Pound vs US Dollar. With several economic events that have the potential to cause some high volatility, we may see some big moves on this pair. Today we had an inflation report for the United Kingdom. Tomorrow we have the Gross Domestic Product being released from the United States. Thursday will be a speech from the Governor of the Bank of England, and that will be followed, on Friday, by the Gross Domestic Product from the United Kingdom.
We can see from the 30 minute chart below of the GBPUSD, the big drop that occurred in the 8:30 time frame. This was a big drop relative to the other 30 minute candles. However, from a daily perspective, the move was not hugely significant. In fact, the Average True Range over the last 7 days is 49 pips. During that 30 minute candle, the range from high to low was 49 pips. Essentially you had a day’s movement wrapped up in a half hour.
While some economic events can create great volatility, it is typically short lived. These events rarely cause a longer term impact to the currency. With so many economic reports released each week, it would take the majority of the reports, over time, to be bullish or bearish, to really have a long term impact on the currency.
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