GBP/USD Price, Chart and Analysis:
- Lockdown measures being eased will help boost the ailing UK economy.
- Talk of a Brexit ‘landing zone’ re-surfaces.
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UK Prime Minister Boris Johnson said yesterday that a raft of lockdown measures will be rolled back this weekend to allow ‘more people to return to work and the public to get back to more of the things they have missed’. These measures were originally scheduled to come into force at the start of August but were delayed due to concerns over the ongoing spread of COVID-19. This easing will primarily help the UK service sector and includes socially distanced sporting events, music and theatre and a range of beauty services. While Sterling may not push higher on this news, it should add additional credibility to the current bid.
EU/UK trade talks are also back in the spotlight after Ireland’s Taoiseach Micheal Martin suggested that there may be a ‘landing zone’ near that would be suitable for both sides, if both sides remain flexible. According to The Daily Telegraph, Ireland’s Taoiseach said, ‘I think where there is a will there is a way…it seems to me that there is a landing zone if that will is there on both sides and I think it is, on the European Union side and on the British side to find that landing zone’. Any positive Brexit news will push Sterling back towards multi-month highs.
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GBP/USD remains stuck in a narrow short-term trading range with supportive prior lows and the 20-dma around and just below 1.3000. If GBP/USD wants to make a fresh multi-month high above 1.3202, then resistance either side of 1.3130 needs to be broken and opened above to help confirm the move. Recent price action is helping to form a basic bullish pennant formation and if this continues the pair may well break higher soon.
Pennant Patterns – Trading Bullish and Bearish Pennants
GBP/USD Daily Price Chart (January – August 14, 2020)
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