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GBP/USD Erased Previous Day Gain - Bullish Channel to Support! 

EagleFX

During Friday's Asian trading session, the GBPUSD currency pair failed to extend its previous days' winning streak. They took offers below 1.2600 level mainly due to the risk-off market sentiment, which underpinned the broad-based U.S. dollar and kept the currency pair bearish. The reason for the currency pair's bearish bias could also be attributed to the fresh Brexit uncertainty, which exerted bearish pressure on the pair. In the meantime, the pair's losses were further bolstered by the new anxiety that U.K. turns down E.U. coronavirus' vaccine scheme'. At this time, the GBP/USD currency pair is currently trading at 1.2572 and consolidating in the range between 1.2567 - 1.2612.

At the coronavirus front, the United States, which has been considered as the epicenter of the virus due to the hiked number of cases, took further pace in the fresh virus cases. As per the latest report, the U.S. cases crossed a total of 3.0 million marks and reported over 60,000 cases on Thursday. Furthermore, over 12.2 million cases and 550,000 deaths globally were reported as of July 10, as per John Hopkins University data. Most of the states like Florida, Texas, and California, said a record-high number of new cases on Thursday. According to Goldman Sachs, hospital capacity in Arizona, Texas, and Florida has filled up by COVID-19 patients, and state officials are forced to consider additional measures.

As in result, the broad-based U.S. dollar flashed green and took bids on the day as investors preferred the safe-haven asset mainly due to concerns about the mounting coronavirus cases. However, the gains in the U.S. dollar kept the pair under pressure. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies gained 0.13% to 96.802 by 10:06 AM ET (3:06 AM GMT). The gain in the U.S. dollar was further supported by the reports that the U.S. Supreme ruled out that Democratic-led congressional committees were allowed to obtain U.S. President Donald Trump's financial records, as reported by Reuters.

However, the ever-increasing case of coronavirus and Brexit fears recently overshadowed the U.K. fiscal stimulus optimism. The announced measures totaled £30 billion, including a £2 billion kickstart scheme to create more jobs for youthful people. However, the package was relatable with market expectations. It introduced to encourage economic growth following the slowdown triggered by the lockdown measures imposed to halt the virus's spread.

The report came that the British government has recently stepped back from an opportunity to join a European Union coronavirus "scheme" after ministers expressed concern over "costly delays." This statement initially weighed on the cable pairs and contributed to the pair losses.

Elsewhere, the tussle between the U.K. and China over Beijing's Hong Kong security law remained on the card but refrained from offering any further negative news. Despite the earlier reports that the E.U. and U.K. were close to finding common ground on the issue of fishing rights, the uncertainty over this issue remained on the cards, triggered by the reports that the E.U. was still demanding too much from the U.K. and once again Boris Johnson politely told E.U. to "go to hell."

In the absence of the major data/events to be released on the day, the market traders will keep their eyes on the USD price dynamics and coronavirus headlines, which could play a key role in determining the intraday momentum.


Daily Support and Resistance

S1 1.2352

S2 1.2467

S3 1.254

Pivot Point 1.2581

R1 1.2654

R2 1.2696

R3 1.2811

The GBP/USD is trading with a bullish bias around 1,.2595 area after falling from 1.2672. On the 4 hour chart, the GBP/USD pair has formed a bullish channel supporting the pair around 1.2590 level. Closing of the hammer candle above 1.2586 support level can drive bullish correction in the Cable. The technical indicators are still suggesting bullish bias above 1.2580 level to target 1.2674 level, and above this next target can be 1.2750. Good luck!

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