GBPUSD Breaks Above the 200-Day SMA. Is the Break Sustainable?

GBPUSD
GBPUSD

GBPUSD breaks to five-month highs as the risk appetite has returned to markets pushing the safe-haven USD lower. Investors shift their attention today to risky assets after positive results from the initial phases of the coronavirus vaccine from AstraZeneca and Oxford University. More pharmaceutical companies are making progress in their vaccines, such as Pfizer and Moderna.

News in early European trading session that the member countries have reached an agreement on the 750 billion coronavirus relief fund and a 1.1 trillion budget also boosts investor sentiment.

On the EU-UK Brexit negotiations, we haven’t seen any development the previous week in London, and now analysts see that a deal can’t be reached before the EU summit in October.

On the economic data, the UK government borrowed 34.8 billion in June above the forecasts of 34.3 billion, but below the 45.5 billion borrowed min May. Now the total UK government debt has reached 1.98 trillion.

GBPUSD Daily Technical Analysis   

GBPUSD is 0.38% higher at 1.2707, at the highest level since June 11 and breaking above the critical 200-day moving average resistance that the pair rejected several times the last month. We have discussed that level in our article: GBPUSD Upside Capped At 200-Day Moving Average. Bulls are waiting today for a credible settlement above 1.27 that would enhance the positive momentum. 

On the upside, first hurdle for the GBPUSD stands at 1.2716 the daily high. Above that level, the next resistance for the pair would be met at 1.2750 the high from June 11. A successful break above 1.2750 is likely to pave the way for a move to 1.2816 the top from June 10. 

On the other side, initial support for the pair stands at 1.2650 the daily low. In case GBPUSD breaks below the 1.2650 support level, the pair could retreat towards 1.2517 the low from yesterday’s trading session. The next support zone would be met at 1.2463 the 50-day moving average. 

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GBPUSD Daily Chart

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