The Pound was one of the currencies which benefited from the bearish greenback situation in July. August has seen the Pound recede slightly on profit-taking. This Monday, the GBPUSD has edged higher once more, as the proposed talks between the US and China have been postponed. President Donald Trump has also hinted at going after more Chinese companies such as Alibaba, and this is compounding the US Dollar’s bearish sentiment as markets get spooked that tensions between Washington and Beijing could worsen if this move comes to fruition.
The fundamentals for the GBPUSD pair will be dominated by proceedings from the EU-UK post-Brexit negotiations, as well as the FOMC minutes due for release on Wednesday. Domestically, the coronavirus situation would also be in view, as schools are scheduled to reopen in September. Traders could be watching out for new lockdowns, how well the coronavirus pandemic in the UK is controlled.
On the economic calendar, the CPI would kick things off on Tuesday. However, the news releases for the week from the UK are not expected to be of high market impact, but you never know. The GBPUSD is up 0.07% on a day that has so far shown muted trading volume. The pair trades at 1.30877 as at the time of writing.
Technical Outlook for GBPUSD
The GBPUSD is currently trading in a tight range bordered by the 1.29469 floor, and 1.31754 acting as the ceiling. A break above this ceiling targets the 1.33193 price level (17 December 2019 high). If price advances beyond this level, then the 11 July 2016, 4 June 2018 and 9 December 2019 highs at 1.34765 form the new target, with 1.36117 and 1.37916 lining up as potential targets down the road.
On the flip side, a rejection at the ceiling could allow the price to make a return to the floor, where a breakdown of that price level allows 1.29469 to become the next downside target. Below this level, we could see additional support provided by 1.28589 and 1.27558, in that order.
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GBPUSD Daily Chart
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