GBPUSD seesaws today having hit earlier fresh four-month highs as the pressure on USD eased today. Risk-on sentiment drives investors away from the USD, which acted as a safe haven asset during the coronavirus crisis. Above that, the rising number of new infections in the southern U.S. also weigh on the greenback.
The British pound is feeling the pressure from the uncertainty around the Brexit negotiations. EU said that is looking for a deal around October, but for now, the talks have stalled and the previous week talks finished without any agreement.
I expect a consolidation today and tomorrow at four-month highs ahead of the Fed decision tomorrow. Traders expect that the Federal Reserve will keep interest rates unchanged and will reiterate that it is prepared to take further action and use all tools available to help the coronavirus battered U.S. economy. Most of the economists don’t expect the Fed to move or say something about negative interest rates, but we can hear some other measures such as yield curve control on some bonds.
GBPUSD Price Daily Analysis
GBPUSD is 0.01% lower at 1.2880, as the recent mini-rally that drove the pair to four-month highs stalled below the 1.29 mark. Bulls are in the driver’s seat, and the pullbacks should be considered as a buying opportunity. Traders should not ignore the RSI 14 index which trades to overbought territory. The index warns that a sharp correction can’t be ruled out.
Here are some levels that traders should watch. On the downside, bears need to break first below the intraday lows at 1.2838. If the GBPUSD breaks below 1.2838, might challenge 1.2699 the 200-day moving average. The next level to keep an eye for GBPUSD is 1.2643 the low from July 22.
On the other hand, the daily high at 12904 would provide the first resistance. Above 1.2904 the next resistance for the pair awaits at 1.2977 the high from March 11. If bulls break that level, then the next target would be at 1.3118 the top from March 10.
GBPUSD Daily Chart