GBP/USD Daily Forecast – Attempt To Settle Below 1.2400

GBP/USD Video 25.06.20.

U.S. Dollar Gains Ground Amid Increased Demand For Safe Haven Assets

GBP/USD has declined closer to 1.2400 as fears about the second wave of coronavirus pandemic and the associated lockdowns increased demand for safe haven assets like the U.S. dollar.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has managed to settle above the 97 level and continues its rebound.

Governors of New York, Connecticut and New Jersey have ordered a two-week quarantine for those arriving from eight other U.S. states, a disturbing sign that new virus containment measures may soon be implemented.

Meanwhile, Disney had to postpone the reopening of Disneyland in California as the state did not issue reopening guidelines due to intensified spread of coronavirus.

In addition to worries about the worsening situation on the coronavirus front, the market sentiment will soon get tested by the release of new U.S. Initial Jobless Claims and Continuing Jobless Claims data.

Analysts expect that 1.3 million Americans have filed for unemployment benefits in a week while 20 million failed to find a new job and were still getting unemployment benefits.

The U.S. will also provide the final estimate of the first-quarter GDP Growth Rate. The analyst consensus calls for a GDP Growth Rate of -5%. Meanwhile, Durable Goods Orders are expected to grow by 10.9%.

Technical Analysis

GBP/USD has settled below the 50 EMA at 1.2460 and continues its downside move. The nearest support level for GBP/USD is located at the recent lows at 1.2350.

In case GBP/USD manages to get below 1.2350, it will gain additional downside momentum and head towards the low end of the current trading range between 1.2250 and 1.2650.

On the upside, the 50 EMA at 1.2460 will serve as the first important resistance level for GBP/USD. The 20 EMA is in the nearby so I don’t think that it will play a role of a separate resistance level.

If GBP/USD gets above the 50 EMA and the 20 EMA, it will head towards the high point of the recent rebound attempt near 1.2530.

For a look at all of today’s economic events, check out our economic calendar.