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

GBP USD Technical Analysis March 26 2020

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

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.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD stabilizing as US coronavirus cases continue to climb

EUR/USD is trading around 1.1250, pressured amid concerns about the spread of coronavirus in the US. Traders are digesting the upbeat Non-Farm Payrolls figures already out ahead of the long US weekend. 


GBP/USD attempting a bounce amid thin liquidity

GBP/USD is closer to 1.25, off the lows. Top-level EU-UK Brexit talks have been postponed until next week amid disagreements. The UK is continuing to reopen while US coronavirus cases are surging. 


Bitcoin must endorse the time of Ethereum has come

The crypto market remains in a choke point, and after signs of a possible upward shift yesterday, the market was once again disappointed to see Bitcoin in the low range of the $8900 to $9000 choke point.

Read more

Gold: There is a bearish signal on the 4-hour chart

Price action has been slow on Friday due to the bank holiday in the US as the nation celebrates independence day. This week has been an interesting one as there has been some good economic data but some very bad coronavirus news in the US. 

Gold News

S&P 500: Futures struggle to refresh two-week top

S&P 500 Futures prints mild loss of 0.10% while declining to 3,126 during the initial hour of Tokyo session on Friday. In doing so, the risk barometer fails to extend the previous four-day winning streak.

Read more

Forex Majors