The GBP/USD drifted sideways after a new report by the Macmillan Cancer Support revealed distressing numbers about coronavirus. The pair is also on edge ahead of US Q1 GDP data, pending home sales, and the Fed interest rate decision.
More deaths expected in the UK
A study by the Macmillan Cancer Support showed that almost 18,000 cancer patients would die in the next twelve months. The report attributed this to the fact that most hospitals have been forced to suspend cancer treatment because of the coronavirus pandemic. This number will be 20% above the people who die from cancer annually in England.
According to the NHS, the coronavirus death toll currently stands at more than 21,000. This means that if the Macmillan study is accurate, the UK would have almost 40,000 deaths.
In the meantime, the number of confirmed coronavirus cases in the UK has risen to more than 161k. This makes it one of the most infected countries in the world. On a positive side, the numbers have been falling. Yesterday, the UK had 3,996 cases, which was lower than the previous 4,309. At its peak, the country reported more than 8,000 cases per day.
Focus to remain on the USD ahead of Q1 GDP data and Fed interest rate decision
The focus on the GBP/USD pair will be on the US dollar because of the vast data we will receive from the US. Today, we will receive the first reading of US Q1 GDP data. Analysts polled by Bloomberg expect the economy to have declined by 4.0% in the first quarter. According to Estimize, most analysts expect the economy to have declined by 0.4%. Those at Goldman Sachs expect the economy to have declined by an annualised rate of 4.8%. Later on, we will receive the pending home sales data. Analysts expect the sales to have dropped by more than 10% in the past month.
The biggest news will be the Fed interest rate decision. Most analysts expect the Fed to leave interest rates unchanged at the current range of between 0 and 0.25%. The bank could also reassure the market about the actions it intends to do to cushion the economy from the current pandemic.
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GBP/USD technical outlook
On the four-hour chart, we see that the GBP/USD pair is rising, albeit slowly, as bulls attempt to retest the weekly high of 1.2653. At the current price of 1.2475, the pair is trading slightly below the 61.8% Fibonacci retracement level. The price is also slightly above the 100-day and 50-day exponential moving averages.
Therefore, I expect the upward trend to continue as bulls attempt to cross the 61.8% retracement at 1.2507. Moves above this price will likely see the pair attempt to retest the 78.2% retracement at 1.2800.
On the flipside, I would consider any moves below the 50-day and 100-day EMA as being bearish, because it would mean that there are still sellers in the market.
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