GBP/USD has settled below 1.2400 and tries to get below the support level at 1.2350.
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GBP/USD Video 22.06.20.
British Pound Remains Under Pressure
GBP/USD settled below 1.2400 as fears about the second wave of coronavirus and continued problems in Brexit negotiations put pressure on the British pound.
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has settled near 97.5 and tries to get above this resistance level.
If this attempt is successful, the U.S. dollar will gain more upside momentum, and GBP/USD will find itself under additional pressure.
Coronavirus is once again in spotlight as the World Health Organization reported a record number of new virus cases in a day. On Sunday, WHO recorded 183,020 cases. Just a week ago, the number of new cases was below 150,000 per day so the pandemic continues to get worse.
Meanwhile, the UK Prime Minister Boris Johnson is set to reveal another easing of the coronavirus lockdown on Tuesday. It is widely believed that he will relax the two-metre social distancing rule which puts pressure on many businesses.
Today, the U.S. will report Existing Home Sales for May. Analysts expect that Existing Home Sales have declined by 2.3% month-over-month as virus containment measures and economic uncertainty put pressure on sales.
GBP/USD continues its downside move and has settled below 1.2400. GBP/USD has already tested the support at 1.2350 but this support level proved its strength.
In order to continue the current downside move, GBP/USD will have to settle below the support at 1.2350. If this happens, GBP/USD will gain downside momentum and head towards the low end of the current trading range at 1.2250.
On the upside, the nearest resistance level is located at the 50 EMA at 1.2450. In addition, GBP/USD may face some resistance near 1.2400. In case GBP/USD gets above the 50 EMA at 1.2450, it will have to deal with the next resistance at the 20 EMA at 1.2480.
I’d note that the 20 EMA is declining fast and could soon cross the 50 EMA to the downside, suggesting the continuation of the downside trend. From a big picture point of view, GBP/USD continues to trade between the major support at 1.2250 and the major resistance at 1.2650. Attempts to get out of this range were short-lived, and GBP/USD will likely need strong catalysts to break out of the range.
For a look at all of today’s economic events, check out our economic calendar.