The GBP/USD currency pair this week made two attempts to recover from the current bearish run. Late on Tuesday, the pair spiked to momentarily trade above 1.2800 before shedding all the gains late on. This was followed by a continuous fall that saw GBP/USD hit a new multi-month low of 1.2605 on Thursday.
And on Friday, the pair made another attempt to recover by rallying late on to trade above 1.2727. The GBP/USD pair has earlier looked threatened to fall further after Theresa May announced that she will step down.
GBP/USD Fundamentals Overview
From a fundamental perspective, the GBP/USD currency pair is trading on the back of the news that the UK PM Theresa May will step down on June 7th. May made the announcement on Friday morning following intense pressure from parliament and within her government to give way for another leader to take over.
And after her announcement, Boris Johnson, the MP for Uxbridge and South is now expected to take over. And with his stance highly believed to be a no-deal Brexit resolution with the EU, it now looks certain that the UK might leave the EU without a deal in place.
The immediate future will be exciting to watch from the perspective of trading the GBP/USD currency pair. The new deadline for the UK to leave the EU economic block is October 31st following the extension last month.
On the other hand, with the US delivering another disappointing economic data on Friday to follow yesterday’s fall in Treasury Yields, the Pound Sterling continues to recover against the greenback.
GBP/USD Technical Analysis (the 60-min Chart)
Technically, the GBP/USD currency pair appears to be on a major recovery mission as the greenback continues to surrender ground to the Pound Sterling. The pair is currently positioned centrally between the 100-hour and 200-hour MA lines in the 60-min chart.
This provides interesting opportunities for traders. The bulls will target profits at around 1.2752 in the short-term while the bears will look to pounce by targeting profits at 1.2656.
GBP/USD Technical Analysis (the Daily Chart)
In the daily chart, the pair appears to have recently made a bearish breakout from a downward trending channel. This sets up with another bearish trading range experienced between January and March of this year.
The bulls will target profits at 1.2778 (intermediate) and 1.2871 (long-term) while the bears will pounce by targeting 1.2616 (intermediate) and 1.2485 (long-term).
In summary, the GBP/USD currency pair is trading on the news that Theresa May has finally announced that she is stepping down as PM. On the other hand, the US economic data continues to disappoint while technically, the bearish bias remains strong.