GBP/USD Forecast: Above 1.20 or 1.16? BOE, US jobless claims, set to trigger next wild ride

• GBP/USD has been rising as the US Senate passed the stimulus bill and amid extreme volatility.
• The BOE's rate decision and potentially horrendous US jobless claims are eyed. 
• Thursday's four-hour chart is pointing to further gains.

Brits are forbidden from going to theme parks as part of the lockdown measures – but GBP/USD is certainly a rollercoaster. Wednesday's trading saw a range of over 300 pips – with most of the moves lacking a clear explanation. Markets remain rapid as coronavirus continues spreading and policymakers are rushing to act.

The latest political developments come from the US Senate, which finally passed the $2 trillion stimulus bill after intense talks. The package now goes to the House of Representatives and maybe amended before it reaches President Donald Trump's desk for signature. Andrew Cuomo, Governor of the state of New York, said that the bill does not address his needs. The state is the nation's worst-hit by Covid-19. Failure to pass the bill may boost the safe-haven dollar. 

In Britain, Chancellor of the Exchequer Rishi Sunak is readying more steps, focusing now on small businesses. The government has the backing of the central bank, which is ready to buy more bonds. The Bank of England convenes later in the day – for the third time in as many weeks – for its scheduled meeting.

After cutting interest rates to 0.10% and unleashing £200 billion in additional bond-buying, perhaps Governor Andrew Bailey and his colleagues will focus on lending schemes. There are various scenarios for the pound.

See BOE Preview: Does Bailey have a big bazooka? Only open-ended QE can stun sterling

Thirty minutes after the BOE's decision, the focus will be on US weekly Unemployment Claims. The high-frequency figure – which was almost forgotten for a few years – has jumped from 211,000 to 281,000 last week. It is now projected to leap to anywhere between one and four million, as US businesses lay off people due to shutdowns. 

A relatively low figure may boost GBP/USD while a surge may send investors to the safety of the greenback. 

See: Jobless Claims Preview: Recessionary timelines

Overall, Covid-19 has already taken the lives of over 21,000 people and infected close to half a million. Further headlines from the UK, US and elsewhere are set to rock markets.  Italy – the first Western country to impose lockdowns and the hardest hit – has been reporting no rise in new cases, an encouraging development.

GBP/USD Technical Analysis

Zooming out from the rapid movements to the four-hour chart is showing a gradual uptrend. GBP/USD is benefiting from upside momentum and the Relative Strength Index is below 70 – outside overbought conditions. 

Initial resistance awaits at 1.1975, which was the high point on Wednesday. It is followed by 1.20, a round number which has also provided support last week. 1.2120 and 1.2280 are next.

Support awaits at 1.18, another round level that held the currency pair up. It is followed by 1.1710, a temporary cap earlier, then by 1.1640, Wednesday's low, followed by 1.1530 and 1.1414. 

More Coronavirus: How Trump's shortcuts could lengthen and exacerbate stocks' suffering