GBPUSD Down As UK PM Boris Johnson Tests Positive for Coronavirus

Brexit
Brexit

The GBPUSD is down by about 60 pips as at the time of writing after the UK Prime Minister was reported by Sky News to have contracted the coronavirus. The 55-year old UK PM also confirmed his diagnosis in a tweet a short while ago, indicating that he was self-isolating and would continue to run the affairs of government via video-conferencing.

The UK PM would be the second high profile UK government figure to test positive for the COVID-19 coronavirus this week, after Prince Charles was confirmed to have the virus two days ago.

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Technical Outlook for GBPUSD

The pair dropped from intraday highs of 1.23056 by about 80 pips when the news broke. However, the GBPUSD is trying to claw back some of those losses. However, trading at this time remains very choppy with buyers and sellers struggling for control. 

Yesterday’s daily candle closed above the 1.21761 resistance level. Today’s candle is presently testing that price level too, and a penetrating close that takes the candle’s closing price above that price level confirms the breakout. This move would then open the door for a possible test of the next resistance in line at 1.23695, formed by the highs of 29 July and 11 September 2019. Above this area, the market tops of 12 July and 20 September 2019 also present a target at the 1.25952 price level. 

On the flip side, markets could react more negatively to the news of UK Prime Minister Johnson’s diagnosis, viewing it as part of a broader failure of the UK to contain the coronavirus outbreak. This sentiment could cause the GBPUSD to fall further, testing the 1.21210 support target initially, with the lows of 9 August and 2 September 2019 at 1.20005 presenting another retest target further south.

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