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Bears Dominate the GBP/USD - Downward Channel In Play! 

EagleFX

The GBP/USD currency pair succeeded to stop its 4-day losing streak and rose to the intra-day high above the 1.2400 level while represented 0.50% gains on the day mainly due to the risk-on market sentiment and mildly positive headlines concerning the U.K. which supported the British Pound and contributed to the pair upward movement. On the other hand, the upticks in the currency pair were further bolstered by the broad-based U.S. dollar selling bias-based on the risk-on market sentiment. The GBP/USD is trading at 1.2418 and consolidating in the range between 1.2335 and 1.2423. However, the latest terrorist attack in the U.K. turned out to be one of the major events that kept the pressure on any further gains in the currency pair.

Moreover, the uptick in the currency pair could also be attributed to the probability that the UK Chancellor Rishi Sunak will deliver a cut in the Value Added Tax (VAT) to help the fight against the coronavirus. The hopes of the further easing of lockdown restrictions in the United Kingdom by the PM Boris Johnson also added strength to the risk sentiment and contributed to the currency pair gains.

Apart from the U.K., the risk-on market sentiment was further bolstered by the fresh optimism that U.S. President Donald Trump's stepped back from further punitive measures on the dragon nation. Moreover, the recovery in China's coronavirus (COVID-19) figures and announcement from President Trump's that his administration will not impose a total lockdown again also exerted some bullish impact on the risk sentiment.

As a result, the broad-based U.S. dollar failed to extend its overnight gains and edged lower on the day, possibly due to fresh upticks in the U.S. stock futures, which kept the U.S. dollar prices lower and contributed to the currency pair gains. Whereas the U.S.

At the Brexit front, the talks between the United Kingdom and the European Union have not been showing any sign of progress so far as the U.K. did not show agreeability on the E.U. demands that it committed to remaining part of the European Convention on Human Rights (ECHR), which has blocked the progress on intelligence sharing and a treaty to replace the European Arrest Warrant system.

The market participant will keep their eyes on the U.K.'s CBI Industrial Trends Survey data, expected -59 against -62 prior, for fresh direction. The Chicago Fed National Activity Index and Existing Home Sales could also entertain the market players ahead. Elsewhere, the coronavirus released headlines could not lose its importance.


Daily Support and Resistance

R3 1.2378

R2 1.2369

R1 1.2357

Pivot Point 1.2348

S1 1.2337

S2 1.2327

S3 1.2316

Technically, the GBP/USD prices are facing a bearish pressure below 1.2454 level. The formation of candles under this mark has the potential to go after 1.2340 intraday, while the bearish breakout of this mark can drive selling bias until the level of 1.2220. While the resistance holds at 1.2454 level. On the 2 hour chart, the GBP/USD is also facing resistance by 50 periods EMA around 1.2450, but the bullish crossover can help us capture a quick buy trade until 1.2550 level today. Good luck!

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