Pound aims higher – GBPUSD forecast

Intermediate
  • Global financial markets have shifted to more of a “risk on” theme since the start of this week, rejecting the “risk off” phase seen at the beginning of April, last week.
  • This has been in reaction to coronavirus new cases/ deaths showing some signs of slowing down in some parts of Europe (Italy and Germany) and some US States (NY State).
  • This “risk on” phase has seen a broader weakening of the US Dollar.
  • Despite a small GBPUSD sell off and bounce over the past 24 hours (in reaction to PM Boris Johnson being moved to an intensive care unit), the bias is for GBPUSD gains as the US Dollar weakens.

GBPUSD day trade outlook: Risks higher

A Monday rebound above 1.2302 resistance to 1.2327, then a spike lower and another rebound from above key 1.2125 support (from 1.2163) to reject the negativity from Friday’s selloff through 1.2242 support, to resume the positive tone from the latter March surge above key 1.2423, to switch risks back higher into Tuesday.

·      We see an upside bias for 1.2327 and 1.2396; a break above aims for 1.2475/85, maybe towards 1.2528.

·      But below 1.2217 targets 1.2163, which we would look to try to hold. Below targets key 1.2125.

GBPUSD intermediate-term outlook

We see an intermediate-term range as 1.2125 to 1.2624.

  • Upside risks: Above 1.2624 sets an intermediate-term bull trend for 1.3200 and 1.3515.
  • Downside risks: Below 1.2125 sets an intermediate-term bull trend for 1.1639 and 1.1410.

4 Hour GBPUSD Chart

GBPUSD chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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