Today in the early Asian trading hours, the GBP/USD currency pair flashed green and rose to intraday high above 1.2340 as the broad-based U.S. dollar stays under pressured near 2-month low ahead of U.S. President Donald Trump's conference. On the other hand, the Brexit uncertainty and the intensifying tussle between US-China over Hong Kong turned out to be the key factors that kept a lid on any additional gains in the pair. The GBP/USD is trading at 1.2351 and consolidating in the range between 1.2308 and 1.2354. However, markets are now waiting for U.S. President Donald Trump's conference on China, while U.S. statistics might also offer intermediate moves.
Apart from the U.S. action on China's law over Hong Kong, the United Kingdom also used harsh words against China and showed care for Hong Kong. The tension for China was further bolstered by the U.K.'s decision to ease U.K. citizenship rules for the Hong Kong British national overseas passport holders. Notably, the U.K.'s government joins the Trump administration against China.
As we all well aware that U.S. President Donald Trump has finally set a conference on China's issue after signaling additional sanctions earlier in the week, which is scheduled to happen on the day. In return, China warned to take revenge from the U.S. if it meddled in China's internal affairs.
Despite the intensifying tension between the United States and China, triggered by China's national security laws for Hong Kong and Macau during the previous week, the U.S. dollar ended this week with modest losses possibly due to the recent optimism about a possible COVID-19 vaccine and hopes of a global economic recovery which eventually contributed to the pair's gains. Whereas, The U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.09% to 98.258.
At the Brexit front, Brexit's track is becoming tough day by day with the E.U. Trade Commissioner Phil Hogan hinting the U.K. may have given up on the deal, which also kept the currency pair limited. The reason for the limited moves in the currency pair could also be attributed to the British PM Boris Johnson mishandling of the coronavirus (COVID-19) actions.
The market's risk-tone, as suggested by the U.S. 10-year Treasury yields and Asian stocks, flashed red since the start of the trading session. Looking forward, the U.S. activity and consumer confidence figures will be key to watch. As well as, the U.S. President Trump's conference at 18:00 GMT could also entertain the traders.
Daily Support and Resistance
S1 1.1974
S2 1.2124
S3 1.2194
Pivot Point 1.2274
R1 1.2344
R2 1.2424
R3 1.2574
The GBP/USD prices are consolidated in a bullish channel supported around the 1.2300 level along with resistance around 1.2350 level. The 50 EMA is keeping the Sterling supported around 1.2285 level today while the RSI value is over 50. Most of the technical indicators are suggesting bullish bias. However, the GBP/USD should break above 1.2357 to test the next resistance level of 1.2466. Let's consider taking buy trade over 1.2357 level today. Good luck!