GBP/USD Daily Forecast – British Pound Continues Its Attempts To Gain Ground Against The U.S. Dollar

GBP/USD Video 13.04.20.

With No Important Economic Data Scheduled For Release On Monday, Market Focus Shifts Back To The Virus

GBP/USD continues its attempts to breach the 50 EMA level near 1.2500. Last week, the additional stimulus from the U.S. Federal Reserve was the main catalyst for the markets. This week, the markets’ attention turns to U.S. earnings season, which will serve as a major test for investor risk appetite in various asset classes.

There is no important economic data scheduled for release on Monday, so the virus data and forecasts of the potential economic damage done by virus containment measures will likely be the main catalysts for the markets.

According to data from Johns Hopkins University, U.S. has accumulated 557,571 coronavirus cases while UK has 85,208 cases. UK Prime Minister Boris Johnson was released from the hospital but will spend some time recovering before getting back to work.

The U.S. dollar is showing some weakness against a broad basket of currencies, and the U.S. Dollar Index stays below the psychologically important 100 level.

Interestingly, premarket action in S&P 500 futures indicates that the U.S. market may pull back after the major upside move, but currently this does not help the U.S. dollar.

This week, the attention of traders and investors will stay focused on the U.S. Initial Jobless Claims, which are due to be released on Thursday. Analysts expect that 4.6 million of Americans filed for unemployment benefits, so the cumulative job losses since the beginning of coronavirus crisis are expected to exceed 20 million.

Technical Analysis

Currently, GBP/USD is located at the key 50 EMA resistance level near 1.2500. This level has already been tested many times, so traders should expect increased upside momentum if the pair manages to breach this level to the upside.

In this scenario, GBP/USD will have good chances to complete the rebound and get to the pre-crisis levels at 1.2750. Most likely, this scenario will require U.S. dollar weakness against a broad basket of currencies.

On the support side, the 20 EMA level at 1.2350 serves as the first major support level for GBP/USD. In case this level is breached to the downside, the pair will head towards the next support level at 1.2170.