Sterling rallied to a fresh-week high at 1.2530 before slipping back to finish at 1.2465 in New York, modestly lower from 1.2478 yesterday. Like the Euro, the British Pound was unable to take advantage of the overall weaker US Dollar. The British Prime Minister Boris Johnson has set-out his post-coronavirus recovery plan.
Meantime uncertainty over Brexit continues to weigh on the Pound. Just about halfway through the transition period there has not been much progress from the EU and UK in their negotiations. A top meeting between officials from the European Union and the United Kingdom scheduled for tomorrow has been cancelled. A Financial Times article reported that almost three quarters of UK manufacturers are preparing to cut jobs in the next 6 months. Which will add pressure on the government for more economic stimulus to protect employment.
GBP/USD has immediate support at 1.2460 followed by 1.2430 and 1.2370. Immediate resistance can be found at 1.2500 followed by 1.2530. Look for consolidation today in a likely range of 1.2400-1.2500. Prefer to sell into any rallies to 1.2500.
