- Growing anticipation of the re-opening of the economy in Europe, given the plateauing of coronavirus deaths and cases in Europe (and in some US States), has seen global financial markets move into a “risk on” theme this week.
- The major US stock and European averages have broken higher to new recovery highs, which has broadly sent the US Dollar lower against most currencies, particularly versus the “risk” currencies; AUD, NZD, CAD.
- However, the reserve currencies, such as the Euro and Pound have performed less impressively against the US dollar, with rebounds starting to fade.
- Here we look at the fading rebound for the Pound against the US Dollar, GBPUSD.
GBPUSD day trade outlook: Bias still lower, despite further bounce
Again, a push higher Tuesday above 1.2492 resistance, but stalling from below 1.2526, at 1.2518 and whilst below this area (1.2518/26) to leave negative pressures from the latter April plunge below key 1.2287 (for an intermediate-term shift from bullish to neutral), to just keep risks lower into Wednesday.
· We see a downside bias for 1.2360; a break below aims for 1.2300/1.2298 and 1.2247
· But above 1.2518/26 targets 1.2574, which we would look to try to cap. Above aims for key 1.2647.
GBPUSD intermediate-term outlook
The latter April selloff below 1.2287 saw an intermediate-term shift from bullish to a broader range we see as 1.2163 to 1.2647.
- Downside risks: Below 1.2163 sets an intermediate-term bear trend for 1.1639 and maybe 1.1410.
- Upside risks: Above 1.2647 sets an intermediate-term bull trend for 1.3200 and maybe 1.3515.
4 Hour GBPUSD Chart
