GBP/USD Video 13.07.20.
Demand For Riskier Assets Supports British Pound
GBP/USD continues its attempts to settle above the major resistance level at the high end of the current trading range at 1.2650 as the U.S. Dollar loses ground against a broad basket of currencies.
The U.S. Dollar Index is trying to settle below the 96.5 level after an unsuccessful attempt to get above 97. The U.S. Dollar Index remains in a downside trend as traders bet that the world central banks will continue to provide monetary stimulus to boost the economy. This scenario is favorable for riskier currencies like the British pound.
In addition, the market hopes that either an effective drug against COVID-19 or a vaccine will be available soon. Such a development would be a game-changer for the world economy as it will eliminate fears of the second wave and allow all businesses to reopen at full speed.
Meanwhile, the World Health Organization has reported a record daily increase in the number of global coronavirus cases on Sunday. More than 230,000 people got infected with COVID-19 in one day.
The markets completely ignore the continued problems on the coronavirus front as optimism prevails. This optimism will soon be tested as the earnings season begins in the U.S. Financial results of U.S. companies will surely have a major impact on the global risk sentiment.
GBP/USD is trying to get above the major resistance at 1.2650. If this attempt is successful, GBP/USD will have a good chance to establish a new upside trend after spending several months in a range between 1.2250 and 1.2650.
The nearest resistance for GBP/USD is located at 1.2750. In June, GBP/USD has already tested this resistance but failed to settle above it and returned to the previous trading range.
In case GBP/USD manages to settle above 1.2750, it will head towards the high of the previous upside move at 1.2815.
On the support side, the nearest support for GBP/USD is located at the 20 EMA at 1.2530. If GBP/USD moves below this level, it will head towards the 50 EMA at 1.2480.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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