GBPUSD is under selling pressure for the seventh day in a row as US dollar gaining momentum across the board. The UK government announced a new relief package.
It includes a loan guarantee program for 330 billion, almost 15% of GDP and 20 billion grant and tax cuts. Hospitals, airlines, and retailers are set to receive support. The Bank of England (BOE) also launched a lending facility to buy commercial paper.
The British pound has lost over 9% against the US dollar the last two weeks as today makes fresh six month lows. GBP is under severe selling pressure amid the sell-off in global markets. Investors are running for cover in safe-haven assets such as dollar Swiss Franc and Japanese Yen.
GBPUSD is 0.39% lower at 1.2007 having breached earlier below the 1.20 mark for the first time since September 2019. The technical outlook for the GBPUSD pair is bearish for the pair but has reached an oversold level, and a sharp rebound looks possible from current levels.
On the downside, initial support for the GBPUSD stands at 1.1986 the daily low. The next support area would be met at 1.1958 the low from September 3, 2019.
On the flip side, resistance stands at 1.2130 the daily high. If GBPUSD breaks higher, the next resistance level would be met at 1.2275 the high from yesterday’s trading session. Next supply zone would be met at 1.2419 the high from March 16th.