Bottom line: GBPUSD long term bullish structure remains intact until prices stay above 1.1414 levels. A potential expanded flat corrective wave seems to have terminated around 1.2250 levels last week. Bulls are poised to remain in control and push through resistance above 1.3200 levels.
Fundamental Outlook:
EURUSD may come under some pressure as the Q1 GDP figures and the ECB Meeting are scheduled later this week. Under the COVID-19 economic impact, the ECB is expected to make available another stimulus package of EURO 540 Billion by June.
Italy, which was the worst hit by the COVID-19 pandemic, finally prepares to end shutdown in a phased manner starting May 04, 2020. The COVID-19 curve continues to flatten globally with lower cases and deaths reported.
Oil prices continue to slide lower as we write this article. Brent Crude trades close to 20.00 mark while WTI Crude is trading lower around $15 per barrel as global demand continues to plunge amidst the COVID-19 pandemic.
Technical Analysis:
GBPUSD bulls seem to be back in control after printing lows at 1.2247 levels last week. After several days of consolidation and sideways action, GBPUSD might have finally found support ahead of 1.2200 mark. Ideally, the single currency pair is expected to take on resistance at 1.2900 and 1.3200 respectively.
Structurally, GBPUSD remains bullish as long as 1.1414 holds. The rally that had begun since 1.1414 is very close to terminating its first impulse wave above 1.3200 levels. A break above 1.3200 and further would confirm that the trend has reversed for long term.
Earlier, GBPUSD has plunged lower as a multi-year ending diagonal structure terminated around 1.1414. Ideally, prices should exceed 1.3500 mark to confirm the beginning of a new trend.
Most traders might be poised to hold long positions taken earlier, with protective stops below 1.1414 and projected target above 1.3500 in the medium term.
Prepared by
Harsh Japee, Technical Analyst.
GBPUSD Chart
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