The GBP to USD (GBPUSD) price rose to an intraday high of 1.3040 ahead of a crucial week for the UK and EU relations. The pair is trading at the highest level since September 8.
There are two main factors moving the GBPUSD price today. First, the market is concerned about the health of the US economy as the number of Covid-19 cases continue to rise. In a statement yesterday, a former head of the Centres for Disease Control (CDC) warned that the number of deaths could rise by more than 20,000 by the end of the month.
He warned that as the number of Covid-19 infections rose by more than 50,000 on Saturday. Also, with the election being just a few weeks away, there are concerns that congress will not reach a funding deal any time soon. During the weekend, the White House tried to meet with Democrats in the middle, a decision that irked Republicans. All this means that a deal is unlikely in the near term.
Meanwhile, the GBPUSD is waiting for the next moves on Brexit since the unofficial deadline set by Boris Johnson is on Thursday this week. As such, the current price action by the pair shows that investors are expecting that the EU and the UK will reach a deal, albeit a narrow one.
GBP to USD technical analysis
The two-hour chart shows that the GBP to USD price has been in a strong upward trend and is now trading at the highest level in more than 5 weeks. It has even moved above the important resistance of 1.3000, which is a psychological level and the highest points in September and October. It is also above the 50-day and 25-day exponential moving averages and the ascending trendline that connects the lowest levels on September 25, October 8, and October 9, respectively.
Therefore, I suspect that the price will continue rising today and possibly test the next resistance at 1.3065. In this case, the stop will be at the important support at 1.300 because it will send a signal that there are still more sellers in the market.
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GBPUSD technical chart
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