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GBP/USD Continues to Trade Choppy - Wait for Breakout! 

EagleFX

The GBP/USD currency pair extended its previous day bullish move and rose to a five-week high near the 1.2590 while represented 0.30% gains on the day mainly due to the broad-based U.S. dollar weakness in the wake of risk-on market sentiment. The mildly positive headlines from the United Kingdom exerted some bullish impact on the British Pound and contributed to the currency pair gains. At this particular time, the GBP/USD currency pair is currently trading at 1.2595 and consolidating between 1.2546 and 1.2611. However, the traders are keenly awaiting further updates about the ongoing Brexit talks and U.K. Services PMI ahead of placing any strong position.

The PM of United Kingdom Boris Johnson showed aggressiveness to take the coronavirus (COVID-19) under control after the U.K.'s death toll crossed 50,000 figures, the highest in the world. UK PM Boris Johnson's latest actions about controlling virus concerns provided some support to the Cable bulls.

At the Brexit front, the European Union's (E.U.) Chief Negotiator Michel Barnier pushed again for Brexit extension and pleaded for a compromise, which eventually fueled the fears of soft Brexit and became one of the key factors that kept a lid on any additional gains in the pair.

The U.K. policymakers were showing a willingness to compromise on fisheries and 'level playing field' trade rules only if the European Union decreased its uncompromising demands. However, the European Union officials continued using other ways to urge the Tory Government toward agreeing on these issues. The United Kingdom fishing industry imposed blames on the European Union while saying that the E.U. is using a 'nuclear option' to secure a Brexit deal, whereas the United Kingdom industrial field remained under pressure due to the fear of no-deal Brexit.

On the other hand, the UK PM Boris Johnson gave favors to Hong Kong to maintain its relations with them. In the meantime, the Tory leader was also reported to be offering hope of protection to 3 million Hong Kong people. At the U.S. front, U.S. President Donald Trump did not give any major heed to its previous day's decision about using Federal militaries to stop the ongoing protests near White House, which instantly fueled the risk-on market sentiment. As a result, the market's risk-tone remained positive with the stocks in Asia, and the U.S. 10-year Treasury yields regained their previous strength.


Daily Support and Resistance

    • S1 1.234
    • S2 1.2437
    • S3 1.2493

Pivot Point 1.2535

    • R1 1.2591
    • R2 1.2632
    • R3 1.273

The GBP/USD pair is exhibiting choppy trading sessions as the pair is holding in a narrow trading range of 1.2535 - 1.2647 area. The bullish breakout of 1.2646 level can exhibit buying until 1.2815 level. However, the violation of 1.2618 level is going to be a hard deal fo Sterling as it marks the second top-level for Sterling. A bearish breakout of 1.2535 level can trigger more selling until 1.2400 and 1,2370 area today. Let's wait for economic events to capture a breakout. Good luck!

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