GBP/USD Daily Forecast – Fears Of Second Wave Support U.S. Dollar
GBP / USD video 06/22/20.
British pound remains under pressure
GBP / USD fell below 1.2400 as fears of the second wave of coronavirus and ongoing problems in the Brexit negotiations put pressure on the British pound.
The US dollar index, which measures the strength of the US dollar against a broad basket of currencies, has settled near 97.5 and is trying to get above this level of resistance.
If this attempt is successful, the US dollar will gain more upward momentum and GBP / USD will come under additional pressure.
Corona virus is once again in the spotlight as the World Health Organization reported a record number of new virus cases in one day. On Sunday, the WHO recorded 183,020 cases. Just a week ago, the number of new cases was less than 150,000 a day, so the pandemic worsened.
In the meantime, British Prime Minister Boris Johnson will announce further easing of the coronavirus blockage on Tuesday. It is widely believed that he will loosen the two-meter rule of social distancing that puts pressure on many companies.
Today, the US will report the sale of existing homes in May. Analysts are assuming that portfolio real estate sales will decrease 2.3% month-on-month as measures to contain viruses and economic uncertainties put sales under pressure.
GBP / USD continues to move lower and has leveled below 1.2400. GBP / USD has already tested support at 1.2350, but this support level has shown its strength.
To continue the current downward move, GBP / USD must be below the 1.2350 support. In this case, GBP / USD will gain momentum and will approach the lower end of the current trading range at 1.2250.
On the top is the next resistance level at 50 EMA at 1.2450. In addition, GBP / USD may face some resistance near 1.2400. If GBP / USD rises above 50 EMA at 1.2450, it will have to deal with the next resistance at 20 EMA at 1.2480.
I would like to point out that the 20 EMA is rapidly declining and could soon cross the 50 EMA below, which indicates that the downward trend is continuing. Overall, GBP / USD continues to trade between the large support at 1.2250 and the large resistance at 1.2650. Attempts to get out of this area have been short-lived, and GBP / USD is likely to need strong catalysts to break out of the area.
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This article was originally published on FX Empire
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