Bottom line: GBPUSD bullish structure remains intact until prices stay above 1.1414 potential support. A push above 1.3200/1.3515 resistance would confirm a long term trend reversal ahead.
Fundamental Outlook:
Nearly 10 million U.S citizens applied for benefits over jobs lost in the past few weeks. This number is exceedingly higher since 2009. Adding further to this, COVID-19 cases continue to rise with U.S topping the list of total affected cases around 336,830. Fresh cases added in the past 24 hours were +157, as the country prepares to face a tough week ahead.
The Euro awaits a decision on Corona bond, and this might affect the price action. Countries like France. Spain and Italy, which are hard hit by the Corona crisis are in favor of the above as it would reduce their cost of borrowings. If an agreement is reached, it could boost the EURO while a rejection of the deal could further put pressure on it.
Oil’s surge of over 30% last week could be seen as an end to price war between Russia-Saudi Arabia. The OPEC meet ahead, might add further to the price action, and push through higher levels.
Watch out for GBP market/CIPS UK Construction PMI coming out today at 09:30 AM. It is expected to print 44.00 against 52.6.
Technical Analysis:
GBPUSD might have formed a meaningful bottom around 1.1414 levels on March 20, 2020. It has been in control of bulls since then and has rallied to 1.2485 levels last week before retracing lower again. The recent drop towards 1.2200 levels has been corrective and GBPUSD is expected to form a higher low around 1.2100, before the rally could resume further.
Most traders might be inclined to initiate fresh long positions between 1.2100/1.2200 levels, with protective stop below 1.1414 (strong support). And immediate targets towards 1.3200 and 1.3515 levels respectively.
Prepared by
Harsh Japee, Technical Analyst.
GBPUSD Chart
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