GBPUSD At Daily Highs After A Sharp Drop in U.S. Personal Spending

GBPUSD trading higher in a volatile session having tested earlier the 50-day moving average at 1.2449 from where it started a rebound after the release of economic data from the USA. U.S. weekly jobless claims came in at 3.84 million below the market expectations of 4 million; now the total jobless claims has surpassed 30 million in the last 6 weeks. The Continuing Jobless Claims came in at 17.992M below the forecasts of 19.238M on April 17. The Personal Income came in at -2% below the expectations of -1.5% in March.

A big miss came from personal spending, which fell 7.5% in March marking the biggest monthly fall in 60 years. Market expectations were for a drop of 5%; the previous reading was at 0.2%.
The Chicago Purchasing Managers’ Index came in at 35.4 the lowest reading since 2009, and well below the forecasts of 38 in April.

Yesterday the Fed kept the interest rates unchanged at 0%-0.25% and noted that would use all tools available to ensure maximum employment and price stability goals. The lockdown in the U.K. will remain until May despite the number of confirmed cases and death rate drops.

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GBPUSD Technical Levels to Watch

GBPUSD is 0.35% higher at 1.2514, keeping alive the positive momentum that started the previous week after the first rejection at the 50-day moving average. Yesterday’s upward move pierced again above the 50-day moving average, enhancing the short term positive outlook Weak fundamental data from the USA also weighs on greenback. The technical picture has improved the last week and is more favourable for the short term. The longer-term picture remains bearish as long as GBPUSD stays below the 200-day moving average. 

From a technical perspective, the first resistance for the GBPUSD pair stands at 1.2529 the daily high. The next hurdle would be met at 1.2647 the 200-day moving average. A successful break above the 200-day moving average is likely to open the way for a bigger rally to the next resistance at 1.2753 the 100-day moving average. 

On the flip side, minor support stands at 1.2429 the daily low. In case of a break below the daily low, the GBPUSD price could correct lower towards the 1.2362 in the near term, the April 27th low. If GBPUSD continues lower, the next support area would be met at 1.2248 the low from April 21st. 

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