The GBP/USD currency pair on Thursday succumbed to pressure to fall below the 1.2440 level following the latest round of US jobless claims data. The currency pair has built on last week’s gains to trade at around 1.2651 earlier in the week amid the coronavirus pandemic.
The pair is now pinned to the 200-hour SMA while the 100-hour SMA hovers a few pips higher. The latest pullback has pushed the pair closer to the oversold level of the 14-hour RSI in the 60-min Chart.
GBP/USD Fundamentals Overview
From a fundamental perspective, the GBP/USD currency pair continues to struggle amid the COVID-19 pandemic. The UK, in particular, has been one of the worst-hit countries globally, on a per-capita basis. The US has recorded the highest number of infections and deaths but appears to be managing the impact better compared to other countries. The $2.2 trillion stimulus package checks have already started rolling. This has been a source of optimism in the last few days.
On Wednesday, the US Retail Sales Control Group for March beat the expected change of -2% with 1.7%. Retail Sales ex-autos also impressed with a change of -4.5% (MoM) versus an expectation of -4.8%. However, general retail sales missed the (MoM) expectation of -8% with -8.7% while Industrial Production for the same period disappointed with -5.4% worse than the expectation of -4%.
On Thursday, Housing Starts came short of expectations but building starts were higher than the consensus estimate. On the other hand, the initial jobless claims staggered with 5.245M versus a smaller expectation of 5.105M. In the UK, the BRC like-for-like retail sales for March came in with a change of -3.5% down from -0.4% previously.
GBP/USD Technical Analysis (the 60-min Chart)
Technically, the GBP/USD currency pair appears to be trading under significant bearish pressure. This indicates a short-term bearish bias in the market sentiment.
The bears will be looking to extend the current pullback towards 1.2356 or lower at 1.2202. On the other hand, the bulls will target rebound profits at around 1.2527 or higher at 1.2651.
GBP/USD Technical Analysis (the Daily Chart)
In the daily chart, the GBP/USD currency pair has recently made a sharp rebound. This comes after the pair bottomed at a new multi-decade low of 1.1445. The pair has now recovered to trade closer to the 61.80% Fib level.
The bulls will be targeting long-term profits at around 76.40% Fib level at 1.2792 or higher at 1.3115. On the other hand, the bears will look to pounce for profits at around 38.20% and 23.60% fib levels at 1.2114 and 1.1870, respectively.