GBP/USD Daily Forecast – Mostly Flat After Trump Tests Positive For COVID-19

GBP/USD Video 02.10.20.

U.S. Dollar Little Changed Against British Pound

GBP/USD is mostly flat after U.S. President Donald Trump stated that he tested positive for COVID-19

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, is moving higher after the news. However, the reaction of the currency market is limited compared to the reaction of the stock market.

The U.S. Dollar Index failed to settle above the 94 level despite increased demand for safe haven assets while S&P 500 futures are currently down by 1.5%.

In addition to the surprising news from Donald Trump, traders will also focus on the upcoming U.S. job reports. Analysts expect Non Farm Payrolls of 850,000, while Unemployment Rate is projected to decline to 8.2%.

The recent U.S. employment reports indicated that the recovery of the job market continued so traders have hopes that the upcoming Non Farm Payrolls and Unemployment Rate reports will be better than the analyst consensus.

However, it is unclear how the reports will impact demand for safe haven assets like the U.S. dollar at a time when the market attention is focused on the health of Donald Trump.

Technical Analysis

gbp usd october 2 2020

GBP/USD failed to settle above the nearest resistance level at the 20 EMA at 1.2890 but continues its attempts to develop upside momentum.

At this point, news about Trump’s positive COVID-19 test did not manage to provide enough support to the safe haven U.S. dollar, and British pound is trying to gain more ground against the American currency.

If GBP/USD manages to settle above the 20 EMA, it will head towards the next resistance level at the 50 EMA at 1.2930. A move above the 50 EMA will open the way to the test of the resistance at 1.3000.

On the support side, the nearest support level is located at 1.2815. In case GBP/USD moves below this support, it will head towards the next support level at 1.2780.

If GBP/USD gets below 1.2780, it will get to the test of the support level at 1.2750. A successful test of this level will signal that the recent rebound attempt has failed, and GBP/USD is ready to test September lows at 1.2675.

For a look at all of today’s economic events, check out our economic calendar.