GBP/USD stays below 1.1900 with eyes on BOE, coronavirus outbreak

With the pandemic fears probing the Cable buyers, GBP/USD stays under pressure around 1.1855 while heading into the London open on Thursday. Not only  |  26/03/2020 04:48
  • GBP/USD stalls the two-day winning streak ahead of the key events.
  • Jump in the UK’s coronavirus cases in the spotlight.
  • UK Retail Sales can offer intermediate clues ahead of the BOE.

With the pandemic fears probing the Cable buyers, GBP/USD stays under pressure around 1.1855 while heading into the London open on Thursday. Not only coronavirus (COVID-19) fears, but the cautious sentiment ahead of the UK Retail Sales and BOE also tames the quote’s moves.

In addition to the nearly 1,500 cases of the virus in a single day, to 9,529 from 8,077, the surge in the death toll from 422 to 463 also doubts the UK PM Boris Johnson’s lockdown efforts. The BBC also highlighted the fear of pandemic with headlines mentioning ‘Many thousands of Covid-19 cases’ across Northern Ireland (NI).

Elsewhere, the US Senate finally approved the $2 trillion aid package to combat the disease. However, the bill is yet to be approved by the lower house, which is on holiday till April 20, to become the law. As a result, the policymakers might be called with the 24-hour prior notice, likely on Friday, to vote on the key bundle.

It should also be noted that the coronavirus fears in the US are also widespread with the death toll topping 1,000 and a jump of 12,000 cases on Wednesday.

While portraying the trade sentiment, the US 10-year treasury yields drop nearly six basis points (bps) to sub-0.80% with mixed readings of Asian stocks.

Looking forward, February month UK Retail Sales, expected to remain unchanged at 0.80% YoY, could offer a little move unless flashing extreme changes. Though, the BOE’s tone would be closely followed while expecting any more moves by the UK central bank.

Read: BOE Preview: Does Bailey have a big bazooka? Only open-ended QE can stun sterling

Following that, the US Jobless Claims will also be the key due to expectedly wide changes, mainly due to the pandemic.

It’s worth mentioning that the coronavirus headlines and the details on the US COVD-19 Bill will also add volatility into the pair.

Technical Analysis

In addition to the 1.1900, buyers will also look for a clear break above August 2019 low near 1.2020 to make sure of the recovery moves. In an absence of such instance, the return of 1.1700 can’t be ruled out.

 

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