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GBP/USD Falls Below 1.17 Over Talks Of U.S Stimulus Package Before Regaining Bullish Momentum

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The past one or two weeks have been a whirlwind for the financial markets, and the GBP/USD has not been spared. It has been on a bullish run which saw a brief recovery that sent the price down below 1.17 but not for long as the price of the currency pair continued to surge while COVID-19 fears prevail.

The price of the GBP/USD currency pair has been on a massive bull run on Monday as the U.S dollar continued to weaken due to the mounting concerns over the spread of the coronavirus which seems to be spiraling out of control. This was also on the heels of an upcoming report on durable goods orders in the U.S., with sentiments leaning towards unfavorable expectations.

The short-lived enthusiasm failed to maintain the bearish recovery

The massive bull run on the GBP/USD was briefly undone due to investor expectations of a stimulus package from the Federal Reserve. This saw the currency pair drop on Wednesday morning from a weekly peak price of around 1.19 to the day’s low at 1.16. This was a huge price change that happened in a matter of hours, but it was subdued by coronavirus fears, thus resulting in a bullish price correction. The GBP/USD traded at 1.189 at the time of this press.

Source-fxstreet

Current market outlook

The problem with the current situation is that more people are contracting the coronavirus, the number of deaths have been on the rise from different countries, and people are afraid. The lack of a cure makes it even more difficult to subdue the disease. The next few weeks might not be any better, and people might still be required to stay indoors. It does not make sense to release an economic stimulus package unless the situation gets better. Nevertheless, the U.S Federal Reserve is determined to implement the necessary measures that will help keep the economy afloat, and investors are keen on jumping on the opportunities that will arise.

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