- GBP/USD’ appreciates for the fourth consecutive day and approaches 1.3400.
- The pound shrugs off the historical budget deficit and the grim economic outlook.
- GBP/USD still aiming to 1.3400 and beyond – UOB.
The sterling remains trading on a strong note and has appreciated for the fourth consecutive day on Wednesday, extending its rebound from last week’s lows at 1.3100 to session highs a handful of pips below 1.3400.
The pound has been unfazed by the record UK borrowing plan, nor by the bleak economic outlook depicted by the finance minister Rishi Sunak earlier on Wednesday and has maintained its positive trend against the US dollar to test 12-week highs at 1.3395.
The finance minister has announced a plan to borrow £400 B to offset the devastating economic impact of the COVID-19 pandemic. This will be the highest budget deficit in peacetime. Beyond that, Sunak revealed that UK economy will contract at an 11.3% pace in 2020, the largest economic decline in 300 years, to recoup only half of that loss in 2021.
Cable remains underpinned by hopes that a COVID-19 vaccine might be available early next year and investors’ confidence on a Brexit deal before the end of the transition period on December 31.
GBP/USD targeting 13400 and beyond – UOB
From a technical point of view, the FX Analysis team at UOB sees the pair aiming higher, while above 1.3200: “The underlying tone has firmed somewhat and we see a chance for GBP to edge upwards to 1.3400. At this stage, the prospect for a sustained advance above this level is not high (next resistance is at 1.3440). Support is at 1.3335 followed by 1.3300.”
Technical levels to watch
|Today last price||1.339|
|Today Daily Change||0.0028|
|Today Daily Change %||0.21|
|Today daily open||1.3362|
|Previous Daily High||1.338|
|Previous Daily Low||1.3293|
|Previous Weekly High||1.3312|
|Previous Weekly Low||1.3166|
|Previous Monthly High||1.3177|
|Previous Monthly Low||1.282|
|Daily Fibonacci 38.2%||1.3347|
|Daily Fibonacci 61.8%||1.3326|
|Daily Pivot Point S1||1.331|
|Daily Pivot Point S2||1.3258|
|Daily Pivot Point S3||1.3222|
|Daily Pivot Point R1||1.3397|
|Daily Pivot Point R2||1.3433|
|Daily Pivot Point R3||1.3485|
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.