GBP/USD Video 26.06.20.
U.S. Dollar Continues Its Attempts To Move Higher
GBP/USD stays below the 50 EMA at 1.2460 as the U.S. dollar is flat against a broad basket of currencies after several days of upside.
The U.S. Dollar Index met resistance at 97.5 but continues its attempts to move higher as traders are worried about the worsening situation on the coronavirus front.
On Thursday, the U.S. recorded almost 40,000 new coronavirus cases, which was the biggest increase since the beginning of the pandemic.
It remains to be seen whether markets will pay additional attention to virus news or focus on first signs that the economic situation is getting better.
Yesterday, the U.S. reported that Initial Jobless Claims remained high at 1.5 million but Continuing Jobless Claims dropped to 19.5 million. The decline in Continuing Jobless Claims shows that some workers have been able to find new jobs and stopped receiving unemployment benefits.
In addition, Durable Goods Orders jumped by 15.8% in May on a month-over-month basis, highlighting the rapid increase in economic activity.
GBP/USD continues to move lower in a local downside trend. All attempts to rebound have been met at the high end of this downside trend, and GBP/USD will need additional catalysts to change the trend.
Currently, GBP/USD has settled below the 50 EMA at 1.2460. The 20 EMA is in the nearby at 1.2480, and the area between 1.2460 and 1.2480 will serve as a major resistance area for GBP/USD.
If GBP/USD manages to settle above both the 50 EMA and the 20 EMA, it will likely gain upside momentum and head towards the next major resistance at 1.2650.
On the support side, the nearest support level is located at 1.2350. The 20 EMA is about to cross the 50 EMA to the downside, suggesting the continuation of the downside trend, so the test of the support at 1.2350 may be coming soon.
If this test is successful, GBP/USD will head to the major support level at 1.2250. From a big picture point of view, GBP/USD continues to trade in a wide range between 1.2250 and 1.2650.
GBP/USD made several attempts to get out of this range but they were not successful so it will likely need significant catalysts to leave the range and develop a serious trend.
For a look at all of today’s economic events, check out our economic calendar.