Daily Market Recap - GBPUSD

The British Pound was under pressure last week, falling by over 1.5 percent after the Bank of England announced it was considering negative rates.

The GBPUSD pair saw some respite in the past two sessions but is showing signs of weakness again on Wednesday as the pair slips down 0.28 percent after failing to hold above the 1.25282 resistance level.

The UK market is slowly reopening as lockdown measures are being loosened, with traders weighing up cautious optimism against fears of a resurgence in coronavirus infections in the US, South America, and Germany.

UK economic data released yesterday helped push the British Pound above the psychological 1.25 mark as traders reacted to the manufacturing and services PMI both exceeding expectations.

However, without further significant UK data releases this week, traders will have little to work on other than movements in the Brexit negotiations and the all-important US Q1 GDP figure to be announced on Thursday.

From a technical perspective, the GBPUSD is trading in a consolidation pattern between the 1.25 and 1.23 range and looks set to maintain its bearish momentum in the short run.

With the MACD and RSI both pointing downwards, the next likely test of the GBPUSD will be the short term moving average right above the 1.24 mark. Should selling pressure continue to be felt at that point, the 1.23489 support level may come into play in the following sessions.

Looking ahead, the GBPUSD pair will remain highly influenced by market risk sentiment, as well as the upcoming rounds of Brexit negotiations where expectations are high for a swift trade deal to be agreed upon in the coming months.

(Chart Source: Tradingview 24.06.2020)

The only large upside on the British pound would be an announcement that a trade deal has been reached between the UK and the EU. Before then, the pound will likely continue to trade sideways.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.