The GBPUSD pair seems unstoppable, assince the start of the week it has been storming fresh highs and adding to gains. The major closed Thursday on a strong note near the $1.3040 region and sticks to these levels today.
Yesterday, amid reshuffles in the British cabinet, UK Chancellor of the Exchequer Sajid Javid announced his resignation. He took office in July. Shortly after that, the government confirmed the nomination of chief secretary to the Treasury Rishi Sunak to this post. The Cable benefitted from the news, staged a solid rally, took stops near the key psychological mark 1.30 and then in some hours skyrocketed to 1.3070.
It is worth mentioning that the pair also got boosted by a weaker US Dollar. First of all, the greenback edged lower due to the fall in the US futures and Treasury yields, when Hubei health commission reassessed counting methods and announced much more coronavirus cases that were reported before. In the evening, the US released the inflation data that was mixed, as the core CPI didn’t match the expectations. That also weighed on the USD and helped the major to rise.
Today, markets witnessed some signs of stabilization in the sentiment as China’s Global Times noted that the number of new coronavirus cases outside Hubei province reported on a daily basis decreased for the 10th consecutive day. That improved risk-on a bit, however the Cable kept on trading in the familiar range as investors avoided aggressive bullish bets and preferred to wait and see ahead of the weekend.
In the NA session traders will watch closely the US Retail Sales. As widely expected, the readings will be below previous results. However, strong showings may support the USD and have an impact on the major’s dynamics. Markets will also wait for the US Industrial Production and Michigan Consumer Sentiment Index.
From the technical point of view, the GBPUSD pair sits comfortably above the SМА200 on the 1-hour chart at $1.2970 and challenges the SMA200 on the 4-hour chart. While the pair trades above the SМА200 H1, it will maintain its bullish trend. A sustained breach of the 1.3100 mark seems unlikely today however in the coming days the Cable may rise to the 1.3160 area. The resistance is pegged near $1.3070, $1.3110, $1.3150 and $1.3210 while the support awaits at $1.3015, $1.2945, $1.2875-95 and $1.2830.