GBPUSD trades higher for one more day after the PM Boris Johnson comeback spark a strong rally from March 19th lows. The pair also supported by a weakness in USD. The British finance minister said earlier today that the economy might shrink 30% in the second quarter. The economic data point to one of the worst recessions in history for Great Britain amid the coronavirus crisis, while the global recession is now inevitable, after the disastrous data from the USA and other European countries.
The Bank of England stepped in and cut the interest rates from 0.25% to 0.1%. The BOE also announced the increase of UK government and corporate bonds holdings by £200 billion.
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GBPUSD Technical Analysis
GBPUSD is 0.32% higher at 1.2543, facing the resistance at the 50-day moving average. The pair rallied from the 1.14 lows as the risk appetite returned to markets after the coronavirus induced sell-off. The technical picture is neutral now for the short term while the long term outlook remains bearish as long as GBPUSD stays below the 50-day moving average.
Looking south, the first resistance for GBPUSD stands at 1.2576 the daily top. The next hurdle would be met at 1.2650 the 200-day moving average. A successful break above 1.2650 is likely to open the way for a bigger rally to the next resistance at 1.2823 the 100-day moving average.
On the other side, support seen at 1.2500 the daily low. In case of a break below the 1.2500 support level, the pair price could correct lower towards the 1.2449 level in the near term, the April 13th low. If the pair continues lower, the next support area would be met at 1.1287 the low from April 8th.
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