British Pound (GBP) Latest: GBP/USD Outlook Poor on Demand For Havens
GBP price, news and analysis:
- Monday’s dramatic plunge in the price of US crude oil for May delivery has sent investors into safe havens, particularly the US Dollar, putting downward pressure on GBP/USD.
- The latest UK jobs data are largely historic so have left GBP unaffected, and there is also likely to be little response to a new round of Brexit talks this week.
- Meanwhile, from a technical perspective, a rounding top chart formation is reinforcing the likelihood of GBP/USD easing further.
GBP/USD outlook negative
GBP/USD is coming under pressure from renewed demand for safe havens, particularly the US Dollar, in the wake of Monday’s dramatic plunge into negative territory of the May US crude oil contract.
GBP/USD Price Chart, Four-Hour Timeframe (April 6 – 21, 2020)
Chart by IG (You can click on it for a larger image)
Moreover, as the chart above shows, a bearish rounding top formation looks to be developing and that also suggests further losses in GBP to come. The GBP/USD pair has dropped already from a high of 1.2648 on April 14 to its current level close to 1.24 and that decline looks like extending.
Brexit talks resume
Meanwhile, Brexit talks resume this week but are unlikely to affect Sterling as trading remains dominated by the impact of the coronavirus pandemic, with “risk off” moves continuing to benefit the US Dollar. The calendar for the Brexit talks is below:
UK jobs data
This session, UK employment data were released but have had little impact on GBP as they are largely historic – painting a picture of the jobs market before the main impact of the Covid-19 outbreak. Average earnings rose by 2.8%, less than expected, while the claimant count rate was unchanged at 3.5%. The jobs market will certainly deteriorate further on the economic impact of the pandemic.
More details are here on the DailyFX economic calendar.
We look at Sterling regularly in the DailyFX Trading Global Markets Decoded podcasts that you can find here on Apple or wherever you go for your podcasts
--- Written by Martin Essex, Analyst and Editor
Feel free to contact me via the comments section below
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.