On Monday, the GBPUSD pair lost some traction, edged lower from weekly highs and finished the day in red near the key 1.30 mark. Today, the major seesawed in the narrow range of $1.2990-05, then slipped to the 1.2975 region, before staging a solid rebound to the 1.3040 area in the last hours.

In Asia, despite positive news from the US-China trade front and upbeat comments from China’s National Health Commission (NHC) about the slowdown of the coronavirus spread – 1,886 new cases and 98 deaths versus 2,048 cases and 105 deaths reported yesterday – the market mood was soured by warnings from Apple Inc. The company said that due to the material impact of coronavirus on the business, it might not meet its revenue guidance for the second quarter and the bottom line would be lower than expected.  

The announcements spooked investors and weighed on the Asian equities, US futures and Treasury yields while the US Dollar mostly ignored the events. It staged a small pullback from 99.12 to 99.05 but kept on trading with gains near the YTD highs and didn’t give much support to the major.

However, the key driver behind the Cable’s rise was the UK Claimant Count Change. In January, the number of jobless claims shrank to +5.5K versus +22.6K expected. And though the Unemployment rate remained unchanged at 3.8%, the release boosted the GBP and thus helped the major to witness a rally.

It’s worth mentioning that half an hour after the British employment report Germany released its ZEW indices that were a total disappointment – the headline reading dropped to 8.7 in February versus 21.5 expected while the Current Conditions index didn’t match the forecast either (-15.7 vs. -10.3 expected). Evidently, ZEW reflects traders’ fears over the negative coronavirus impact on the global economy and while the coronavirus risks persist, the single currency will continue to suffer from it (on weak German numbers the EURUSD pair refreshed 34-month lows). However, the new disease will apparently affect the whole market and all the currencies in general.

From the technical point of view, the GBPUSD pair still sits comfortably above the SMA200 in the 1-hour chart and while the major stays here, it will maintain its bullish tone intact. The resistance awaits at $1.3060-70, $1.3150 and $1.3210. The support is at $1.2970, $1.2945 and $1.2875-95.


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