GBPUSD Ichimoku Cloud Analysis: Expect More Downward Pressure

The GBPUSD pair is little changed today as investors react to the surging number of coronavirus cases in the United States. They are also increasingly concerned about Brexit, with the June 30 deadline nearing. The GBP/USD pair is trading at 1.2400, which is below this week’s high 1.2541.

US coronavirus cases rises

The GBPUSD is reacting to the surging coronavirus cases in the United States. According to Johns Hopkins University, the number of daily infections rose by more than 39,000 cases yesterday. This is the highest number of cases increase ever recorded. And in a blistering report, the CDC said that the number of cases may have reached 20 million, which is a record.

This is an important number considering that the country has confirmed just 2.4 million cases and 122,000 deaths. And according to the University of Washington, the number of deaths may increase to 180,000 by October this year.

Brexit risks remain

The GBPUSD pair is also reacting to the rising risks of Brexit as the fifth round of talks. The talks will resume on Monday and conclude on Friday. These talks are important because June 30 is approaching. This is the deadline in which the UK and the European Union are expected to ask for an extension to transition.

In a statement yesterday, David Frost, the chief EU negotiator said that the UK would not ask for the extension. And in a speech, EU parliamentary head said that Boris Johnson was not interested in making any compromises. He said:

“Obviously as an agreement, it has to satisfy both parties that it cannot advantage one over the other. And this puts us in a situation in which at the moment we are frankly a little bit worried.”

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GBPUSD Ichimoku Analysis

On the four-hour chart, the GBPUSD pair is trading near its lowest level on June 22. The price is along the 61.8% Fibonacci retracement level. This retracement is drawn by joining the highest point on June 10 with the lowest level on May 22. Also, the price is below the 100-day and 50-day exponential moving averages. The price is also below the Ichimoku cloud. This is usually an indication that the price may continue falling as bears target 1.2336, which is the lowest level on June 22.

On the flip side, a move above 1.2465 will invalidate this trend. By moving above this level, the price will be re-entering the Ichimoku cloud, which is a bullish signal.

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