British Pound (GBP) Latest: GBP/USD and FTSE Rally as PM Mulls Lockdown Modifications
British Pound (GBP) and FTSE 100 - News, Prices and Analysis:
- UK lockdown may be changed sooner than original review date.
- UK assets get an uplift with GBPUSD at a fresh one-week high.
GBP/USD and FTSE 100 Boosted by Lockdown Talks
There are various reports in the media that UK PM Boris Johnson is considering modifying the UK lockdown ahead of the May 7 review date. The Prime Minister will be hosting a coronavirus meeting today and may offer hope of a staggered way out of lockdown. The PM will have noted that Sunday’s COVID-19 numbers showed a decrease across the board, and this may allow him room to begin unlocking the economy earlier than anticipated. The Daily Telegraph quotes one Conservative source saying ‘There is a desire to open the economy. There is a broad acceptance that we can’t just close everything down until a vaccine is found’.
The FTSE 100 continues to nudge higher and is probing levels last seen nearly two weeks ago. The UK big board opened above both the 20- and 50-day moving averages and is closing in on the 38.2% Fibonacci retracement level at 5,889 and the April 14 six week high at 5,944. The FTSE continues to post higher lows and price action may become more volatile around the April 14 high. The recent higher lows will offer protection back to the 5,530 double low made on April 15/16.
FTSE 100 Daily Price Chart (September 2019 – April 27, 2020)
GBPUSD is pushing higher in early turnover, aided by the lockdown talk. Cable is seemingly shrugging off last week’s Brexit talks where both sides admitted that they were no closer to coming to an agreement than before. EU chief negotiator Michel Barnier said that progress between the two sides was disappointing, while the UK highlighted limited progress. If the two sides cannot come to an agreement, the UK will adopt WTO trade rules on January 1, 2021.
GBP/USD continues to post short-term higher lows and has broken the downtrend off the April 14 high at 1.2648. The pair are back above the 20-dma and the 50-dma but the move needs a close above here to give more credibility to the upturn. A weaker US dollar is also helping fuel the move.
GBP/USD Daily Price Chart (September 2019 – April 27, 2020)
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