GBP/USD surges above 1.2100 as US dollar collapses


  • Wall Street extends rally, Dow Jones up by more than 5%. 
  • DXY down 1.40%, boost GBP/USD to one-week highs above 1.2100.

The GBP/USD rose above 1.2000 at the beginning of the American session and recently reached a fresh one-week high at 1.2160. It is trading near the top, almost seven hundred pips above the weekly low. 

The ongoing recovery in Cable faces the next resistance at 1.2200/20 while the 1.1970/80 area has become a key short-term support. Technical indicators in the four hours chart are approaching overbought levels but the momentum remains solid with no signs of correction. 

It’s all about the greenback 

The decline of the US dollar is the critical driver of the GBP/USD rally. The DXY is down 1.40% on Thursday and it dropped back below 100.00, to 99.54, the lowest in a week. In Wall Street, the Dow Jones gains 5.30% and the Nasdaq 3.80%. The improvement in risk sentiment weakened the US dollar

Earlier on Thursday, Fed’s Powell said the central bank will not run out of ammunition. Later, initial jobless claims data showed the largest rise to record high levels: 3.283 million, almost five times the previous historic highs. 

The Fed is now on an open-ended QE program and the US Senate approved an economic package of $2 trillion, to mitigate the impact of the coronavirus. Those events help risk sentiment. Still volatility is at extreme levels and markets look unstable. 

Technical levels

GBP/USD

Overview
Today last price 1.2134
Today Daily Change 0.0254
Today Daily Change % 2.14
Today daily open 1.188
 
Trends
Daily SMA20 1.2404
Daily SMA50 1.2766
Daily SMA100 1.2896
Daily SMA200 1.2673
 
Levels
Previous Daily High 1.1974
Previous Daily Low 1.1639
Previous Weekly High 1.24
Previous Weekly Low 1.1412
Previous Monthly High 1.3204
Previous Monthly Low 1.2726
Daily Fibonacci 38.2% 1.1846
Daily Fibonacci 61.8% 1.1767
Daily Pivot Point S1 1.1688
Daily Pivot Point S2 1.1496
Daily Pivot Point S3 1.1354
Daily Pivot Point R1 1.2022
Daily Pivot Point R2 1.2165
Daily Pivot Point R3 1.2357

 

 

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