GBP/USD Forecast: Holds onto daily gains above 1.2600
|- GBP/USD managed to post a fifth daily gain in a row despite dollar’s bounce.
- Pound underpinned by the announcement of a £30 billion stimulus package.
- The 200-day SMA remains a key resistance level to break.
The GBP/USD pair is holding onto gains on Thursday and is poised to post its fifth consecutive daily gain, although it has moved off from its daily peak during the American session. After reaching a fresh three-week high of 1.2669 during the European session, the pair gave up most of its gains as the dollar strengthened amid a deterioration in market sentiment. However, the British pound has remained supported by the announcement of a £30 billion stimulus package. On Wednesday, Chancellor of the Exchequer Rishi Sunak laid out a detailed program including a job retention scheme and other means of boosting the economy.
The short-term technical picture remains bullish for the GBP/USD, with indicators in positive territory in the 4-hour chart and the RSI having already corrected oversold conditions, while the 50- and 100-period SMAs have made a bullish cross. Next resistance is now seen at 1.2688, 200-day SMA and the 1.2700 psychological level. A break through the 1.2688-1.2700 area could open the door to further gains targeting 1.2813, June monthly high. On the other hand, immediate support is seen at Wednesday's lows in the 1.2510 area, followed by the 20-day SMA at 1.2480. If the pound loses the latter, it could weaken the short-term bullish structure and pave the way to the June lows.
Support levels: 1.2600 1.2510 1.2480
Resistance levels: 1.2669 1.2690 1.2730
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.