GBP/USD Forecast: A bullish continuation depends on the greenback
|GBP/USD Current Price: 1.2183
- The Bank of England left its monetary policy unchanged, opened doors for further easing.
- The number of coronavirus cases in the UK on the rise after the government’s late response.
- GBP/USD broke above the 38.2% retracement of its March decline at 1.2090.
The GBP/USD pair soared to 1.2196, its highest since March 17, as speculative interest continued to dump the greenback. The Bank of England held this Thursday its usual monetary policy meeting, although it left its monetary policy unchanged, as expected. The MPC unanimously voted to keep rates at 0.10% and the APP at £ 645B and left doors open to expand its facilities program.
Blind demand for the greenback has finally eased amid the latest measures announced by the US, although the pandemic is far from over, with the number of cases worldwide above 500,000. The UK is yet to see the worst of it, after calling for a lockdown too late. The latest data available indicates that the number of cases in the kingdom rose to 11,658, while the death toll hit 578. This Friday, the UK will release March Nationwide Housing Prices.
GBP/USD short-term technical outlook
The GBP/USD pair has retreated from the mentioned high but holds well above 1.2090, the 38.2% retracement of March’s decline. In the 4-hour chart, the pair has advanced well above its 20 SMA but remains below the 100 and 200 SMA, with the shortest, now converging with the 50.0% retracement of the mentioned slide at 1.2300. Technical indicators are easing from overbought levels, but remain well above their mid-lines. The bullish potential will suffer if the pair falls below the mentioned 1.2090.
Support levels: 1.2140 1.2090 1.2050
Resistance levels: 1.2230 1.2265 1.2300
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