GBP/USD consolidates gains around 1.2300 despite Johnson and UK data
- Pound gains versus EUR, USD, CHF and JPY on Monday.
- GBP/USD holds on to gains boosted by market sentiment, unaffected by Johnson’s hospitalization and data.
The GBP/USD pair continues to move sideways around 1.2300, in a wide intraday range between 1.2245 and 1.2320. It is holding on to modest daily gains and fully recovered from the decline it suffered at the beginning of the week.
Cable dropped to test last week lows near 1.2200 following the hospitalization of United Kingdom Primer Minister Boris Johnson. After moving sideways in the 1.2210/1.2250 range, it broke to the upside, despite weaker-than-expected UK data. It held on to gains during the American session, but the rally found resistance below 1.2330, a relevant resistance level.
An improvement in market sentiment offered support to the pound. Several European indexes, including the FTSE 100, had the largest one-day gain in two weeks. In Wall Street, the Dow Jones gains 5.55% and the Nasdaq 5.40%. Optimism regarding a slowdown in the spread of the coronavirus boosted market sentiment.
In the UK, economic data showed a historic decline in car sales in March of 44.4% and also in the Construction PMI that dropped from 46 in February to 39.3 in March. The economic data was mostly ignored by market participants.
Meanwhile, UK PM Johnson remains in hospital, Italy reported the lowest day-to-day increase in infections in a week and US President Trump expressed optimism about the situation, by seeing a “light at the end of the tunnel”.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
