GBP/USD Daily Forecast – Resistance At 1.2750 Stays Strong

GBP/USD Video 09.06.20.

British Pound Remains In The Upside Trend

GBP/USD continues its upside trend and tries to get above the next resistance level at 1.2750.

There are no material economic reports scheduled to be released in the U.S. and the UK today so GBP/USD dynamics will depend on technicals and general market sentiment.

Coronavirus is back to the headlines as the World Health Organization stated that the pandemic was far from over and that the number of new cases was on the rise globally.

According to data from Johns Hopkins University, more than 7.1 million cases of coronavirus have been registered in the world. The U.S. is close to the 2 million mark, while the number of coronavirus cases in UK is just below 300,000.

While the equity markets are enjoying a great rally, the situation in the real economy is not that great, and the U.S. is open to another coronavirus aid package. According to White House spokeswoman Kayleigh McEnany, such package may include a payroll tax holiday.

With no major economic data to serve as a catalyst, the U.S. Dollar Index , which measures the strength of the U.S. Dollar against a broad basket of currencies, is flat.

The U.S. Dollar Index has stabilized between 96.5 and 97 after the rapid downside move but does not show signs of rebound, which is rather bullish for GBP/USD.

Technical Analysis

GBP/USD made an attempt to settle above the resistance level at 1.2750 but this attempt was unsuccessful. In case GBP/USD manages to get above this level, it will likely gain additional upside momentum and head towards the next resistance at 1.2830.

A move above 1.2830 will open the way to the next resistance level at 1.2970. I’d note that GBP/USD stays in an upside channel and maintains good chances for additional upside.

On the support side, GBP/USD has recently found support near 1.2630. This is the first support level for GBP/USD. In case GBP/USD manages to get below this level, it will likely gain downside momentum and head towards the next support level at 1.2500. The 20 EMA is located near 1.2500 so GBP/USD can count on a significant support near this level.

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