GBP/USD clings to modest gains ahead of UK’s data dump

GBP/USD remains mildly positive, up 0.10%, while making the rounds to 1.2400 ahead of the London open on Thursday. In doing so, the Cable registers three-day winning streak ahead of the UK’s February month data dump as well as key US statistics and Fed Chair Powell’s speech.

Although the UK PM Boris Johnson is announced as stable inside the Intensive Care Unit (ICU), the deputy leader Dominic Raab faced challenges as the coronavirus (COVID-19) outbreak pushes the policymakers to extend the lockdown.

Not only had the likely extension of the previously announced three-week-old lockdown but the anticipated shortage of ventilators ahead of the National Health Services (NHS) prediction also troubled the British policymakers. The Guardian cites the NHS study expecting the peak in cases in around seven to 10 days.

Elsewhere, the European Union (EU) fails to agree on any stimulus for the bloc while keep criticizing the Brexit deadline.

The market’s risk-tone also gets heavy due to the surge in the US cases, making it the second highly infected nation, after Italy, in the world. As a result, early Asia risk-on, mainly due to US President Donald Trump’s push for restarting the economy, fails to prevail.

While portraying trading sentiment, the US 10-year treasury yields drop two basis points to 0.746% with stocks in Asia flashing mixed results.

Looking forward, the pair traders are likely to give less importance to the UK’s data-dump comprising Manufacturing Production, Industrial Production and monthly GDP due to being before the virus outbreak period. However, the weekly release of US Jobless Claims and speech from the Federal Reserve Chairman Jerome Powell will be important to watch. Amid all this, virus updates will not lose their importance.

Technical analysis

Considering the pair’s sustained run-up beyond 50% Fibonacci retracement of March month declines and bullish MACD signals, buyers are likely inching closer towards nearly a month-old falling trend line resistance, at 1.2430 now. On the contrary, an upward sloping trend line from March 14 and 50% Fibonacci retracement together restrict the pair’s near-term downside around 1.2305/2300.