GBPUSD jumps above the 1.23 mark amid the gradual reopening of the UK economy as an improvement in sentiment drives investors away from the safe-haven USD. UK Prime Minister Boris Johnson announced that some non-essential shops would be able to reopen from June 15.
British pound supported by news that the EU is willing to drop its maximalist approach on fisheries in trade negotiations with the UK next week. The move by the EU will give a hand to the deadlock in Brexit talks.
Today’s strong upside move for GBPUSD shifts traders attention to the upside as breached above the 50-day moving average a resistance that was capping the upside as we mentioned in our article yesterday: “GBPUSD Upside Caped By the 50-Day Moving Average”. The move today is basically due to weakness in USD and not in the strength of the GBP. The Bank of England Chief Economist Andy Haldane warned earlier today that the UK economy would probably shrink by more than 20% in the second half of 2020.
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GBPUSD Price Technical Analysis
GBPUSD is 1.02% higher at 1.2313, reversing the negative momentum and now the attention after today’s break above the 50-day moving average shifts to higher levels. The technical picture for the long term remains bearish as long as the pair trades below the 100-day moving average.
On the upside, the first hurdle for GBPUSD stands at 1.2326 the daily high. The next resistance would be met at 1.2367 the high from May 12 trading session. A successful break above 1.2367 is likely to open the way for a move higher to the next resistance at 1.2605 the 100-day moving average.
On the flip side, initial support stands at 1.2184 the daily low. If the pair move below the 1.2184 support level, the GBPUSD could retreat towards 1.2163 the low from May 22. If the pair continues lower, the next support zone would be met at 1.2074 the low from March 18 trading session.
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