British Pound (GBP) Latest: GBP/USD Stalls, FTSE 100 Uneasy as US-China Tensions Increase
British Pound (GBP) and FTSE 100 Prices and Analysis:
- The recent GBP/USD uptrend is breaking down.
- FTSE 100 struggles to move higher as the US continues to blame China over outbreak.
Political Tensions on The Rise
A quiet start to the week with most UK asset markets little changed at the off. Risk assets are taking a back seat after US Secretary of State Mike Pompeo continued to point the finger at China for the coronavirus outbreak saying that there was ‘significant evidence’ that COVID-19 came from a laboratory in Wuhan. China continues to reject the claims that they intentionally concealed the true nature of the virus.
In the UK the latest Deloitte CFO survey showed that business optimism has hit its lowest level on record, with 53% of the CFOs surveyed seeing the UK economy in a deep and prolonged downturn until the end of this year, while nearly all of the CFOs said they expect corporate earnings to fall in the next 12 months.
GBP/USD has broken a series of lower highs and currently trades either side of 1.2450, after touching 1.2650 last Thursday. There are a cluster of old lows between 1.2380 and 1.2410 that should act as short-term support before the 50-dam comes into view at 1.2344. The 61.8% Fibonacci retracement level of 1.2518 is likely first resistance.
GBP/USD Daily Price Chart (October 2019 – May 4, 2020)
The FTSE 100 opened the session below the 20-dma for the first time in six weeks and is trading between the 50-dma at 5,628 and the 20-dma at 5,796. Resistance is seen at 38.2% Fibonacci level at 5,889 and support from the mid-April double lows around 5,540.
FTSE 100 Daily Price Chart (November 2019 – May 4, 2020)
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