- An erratic tone and a slight dip lower for the Pound against the US Dollar from the end of last week to start this week.
- But the more recent move Monday-Tuesday has been more a reaction to US Dollar strength after a modest “risk off” tone overnight after Apple (AAPL) warns on coronavirus impact.
- We still see a positive bias for GBPUSD from last week’s U.K. Cabinet reshuffle and surprise resignation of Chancellor Sajid Javid, opening the door to fiscal stimulus, making a rate cut from the Bank of England less likely, which saw the Pound rally. See our Macro Watch weekly roundup for details.
- Risks are skewed to the upside this week and today into the U.K. Employment report.
GBPUSD day trade outlook: Bias remains higher to key 1.3069/70
A Monday dip and lower again overnight to prod just below our Friday support at 1.3001, but then to stop above the 1.2962 level (at 1.2992) and whilst above the higher level to just retain upside pressures from last Thursday’s surge through 1.3010 resistance, keeping risks higher Tuesday.
- We see an upside bias for key 1.3069/70.; a break above aims for 1.3140, maybe for critical 1.320.
- But below 1.2962 sees risk down towards 1.2932 and maybe 1.2894.
GBPUSD intermediate-term outlook
We see an intermediate-term bear trend with the break below 1.2904.
Downside risks: We see downside risks for 1.2768, 1.2516 and maybe 1.2197.
What changes this? Above 1.3070 sets an intermediate-term neutral tone and only above 1.3209 an intermediate-term bull trend.
4 Hour GBPUSD Future Chart