GBP/USD Forecast: Easing from highs but bearish potential limited
|GBP/USD Current Price: 1.2400
- Coronavirus spreading within Johnson’s cabinet, lockdown could extend for months.
- UK’s economic growth expected to be confirmed at 0.0% in the last quarter of 2019.
- GBP/USD holding above a critical Fibonacci support level at 1.2300.
The GBP/USD pair is ending this first day of the week with modest losses around the 1.2400 level. The pair gapped lower at the opening amid the dismal market mood, fueled by discouraging pandemic developments. The number of COVID-19 cases keeps increasing, mainly in the US and Europe. In the UK, another PM Johnson’s advisor was diagnosed with coronavirus, Dominic Cummings, PM’s Chief Adviser. The death toll in the kingdom is now above 1,400. Meanwhile, the deputy chief medical officer, Dr Jenny Harries, said that the effectiveness of the current restrictions would be reviewed at the end of the original three-week period, hinting it may continue for months if needed.
During the upcoming Asian session, the UK will release the March GFK Consumer Confidence Survey, seen at -15 from -7 previously. Later in the day, the kingdom will release the final version of Q4 GDP, seen unchanged at 0.0%.
GBP/USD short-term technical outlook
The GBP/USD pair is trading at around 1.2360 heading into the Asian opening, with a relevant support level at 1.2301, the 50% retracement of its March decline. The 4-hour chart shows that the pair held above its 20 and 100 SMA, with the shortest still advancing below the larger one. Technical indicators have eased from oversold levels but so far hold above their midlines, falling short of confirming additional slides ahead. The bearish case could gain strength on a break below the mentioned Fibonacci level.
Support levels: 1.2350 1.2300 1.2260
Resistance levels: 1.2410 1.2450 1.2495
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