GBP/USD Forecast: Ready to explode out of the range, and the downside looks more appealing

“Thank you NHS” – millions of Brits came out to balconies, windows, and doorsteps to praise the National Health Service’s effort in battling COVID-19. Prime Minister Boris Johnson – who tested positive – was among the cheerers.

His government must be needing some cheering as it faces criticism regarding the handling of the crisis. Testing has been slow, as Health Minister Matt Hancock admitted and promised to speed things up. Another field hospital is also under consideration to cope with the growing number of cases. The death toll has neared 3,000, rising quickly amid a change in methodology.

The latest reports have been weighing on the pound, and so have the government’s efforts to help businesses, which also seem to fall short.

On the other side of the pond, coronavirus causes even more considerable carnage. Jobless claims leaped to 6.648 million in the week ending March 28 – worse than the darkest estimates. It reflects an unemployment rate of around 10%.

The Non-Farm Payrolls statistics for March are in the spotlight today, with an expected loss of only 100,000 positions. The report’s surveys are carried out on the week that includes the 12^th and is thus somewhat stale in the fast pace of events.

Nevertheless, the NFP is set to rock markets and could be another opportunity for the safe-haven dollar to shine. Investors assume that if the US economy suffers, other economies are worse off, and they opt for the world’s reserve currency.

See:

• Nonfarm Payrolls Preview: Is the dollar’s fate sealed?
• US Non-Farm Payrolls March preview: If it’s terrible, it’s expected, if it’s not, April will be

While the jobs report could be stale, the ISM Non-Manufacturing Purchasing Managers’ Index may provide an updated snapshot of how businesses assess the current situation.

Service sectors around the world have born the brunt of the damage, with the Markit/CIPS final Services PMI hitting 34.5, worse than 35.7 originally reported.

See: Non-Manufacturing PMI Preview: The disaster may be delayed...until April

Updated COVID-19 figures from the UK and New York – the epicenter of the disease in America – may also move markets.

GBP/USD Technical Analysis

Several days of range-trading have stabilized both the Relative Strength Index and momentum on the four-hour chart. The currency pair is trading above the 50 and 100 Simple Moving Averages but below the 200 SMA.

Despite the mixed data, bears are in the lead after pound/dollar slipped below the uptrend support line that accompanied it since late last week.

Support awaits at 1.2325, which was was a cushion earlier this week. It is followed by 1.2250, a swing low from earlier this week, and then by 1.2145, a low point last week. 1.20 and 1.1980 are next.

Resistance awaits at 1.2450, which held cable temporarily down during this week. It is followed by the stubborn resistance line of 1.2490, which accompanies it in the past week. 1.2610 is next.