The GBP/USD showed signs of a bearish breakout on Wednesday morning but the Pound Sterling managed to hold its own against the U.S dollar amid pressure over the UK Prime Minister, Boris Johnson’s condition.
The GBP/USD’s performance on Wednesday morning was characterized by some bearish attempts that were neutralized by the Euro’s strong defense against the rallying U.S dollar. The GBP/USD showed strong support around the 1.2296 price level as price bounced back indicating the weak bearish attempts. The GBP bulls were strong enough to counter the dollar’s attempts to push down the price and thus the lack of enough downward momentum.
The GBP/USD’s weak bearish attempts came on the heels of Johnson’s deteriorating health condition which warranted admission into the ICU. The UK Prime minister is currently suffering from the coronavirus which is currently a global pandemic that the world is struggling to get rid of. Reports also claim that the UK Prime Minister has been receiving excellent care and that he is in stable condition. It looks like his health condition did not have an impact on the GBP’s performance contrary to expectations.
Meanwhile, both the Pound and the U.S dollar are still under heavy pressure caused by the increasing concerns over the coronavirus. Both the U.S and the UK reported increased coronavirus infections on Tuesday evening and this may perhaps have influenced investor behavior on Wednesday. This might also be a contributing factor to the muted performance of the GBP/USD currency pair.
Investors are once again taking a cautious stand over the seemingly rising concerns about the coronavirus globally, not just in the UK and the U.S. So far the U.S has reported almost 400,000 infected individuals while the number of infected people in Europe is slightly below 57,000. The rate of infections seems to be increasing contrary to the situation at the start of this week when the infection rates appeared to have been decreasing but it is now clear that is not the case. Experts expect the markets to continue feeling the impact of the coronavirus as long as the viral threat remains uncontrolled.