GBP/USD Gains Support Over 1.2430 - Brace for a Breakout

GBP/USD Gains Support Over 1.2430 – Brace for a Breakout

Posted Tuesday, May 5, 2020 by
Arslan Butt • 2 min read

What’s up, fellas.

The GBP/USD currency pair stopped its 2-day bearish rally and took modest bids near the 1.2465 while representing 0.15% gains on the day. The pair hit the intraday high of 1.2471 mainly due to recovery in the risk sentiment in the financial market. The US dollar also lost its bullish traction which eventually kept the currency pair supportive.  GBP/USD is currently trading at 1.2468 and is consolidating in the range between 1.2431 and 1.2471. However, traders are cautious to take any position due to nervous sentiment ahead of the UK-US trade talks and the final reading of British Services PMI for April.

At the virus front, the fears of the United Kingdom’s coronavirus (COVID-19) death toll reaching Italy’s level turned out to be one of the key factors that kept a lid on any additional gains in the currency pair, at least for now. As per latest reports, the figures from the Department of Health reported that the total deaths toll had crossed 28,734, with the addition of 288 deaths as of 5:00 pm on Sunday.

While identifying the current situation of the coronavirus pandemic, global policymakers and donors decided to step forward on Monday although the many entities and pop-star Madonna promised to give nearly $8bn (£6.5bn) in an online summit, which was hosted by the European Union (EU) President Ursula von der Leyen.

On the other hand, the trade discussions between the United States and United Kingdom representatives will start today. Talks will start on friendly terms from the leaders of both countries, while there are many chances that the post-Brexit trade deal will be able to generate tremendous success.

GBP/USD Gains Support Over 1.2430 - Brace for a Breakout

GBP/USD – Daily Technical Levels

Support Resistance

1.4038 1.4141

1.3992 1.4198

1.3934 1.4245

Pivot Point 1.4095

On the technical front, the GBP/USD prices are holding above the substantial support area of 1.2430. On the 4 hour chart, we can see the horizontal support and upward channel extend the support. We may see a bearish breakout upon the release of UK Services PMI figures, which is due to come out shortly at 17:30 GMT. On the lower side, a bearish breakout of 1.2425 level can trigger selling until the next support area of 1.2315 level, while resistance continues to hold around 1.2515. Let’s wait for news and a breakout.

Good luck!

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