- Upcoming U.S core CPI data expected to be negative.
- GBP is strong despite Brexit concerns.
- S yields provide some buoyancy to the dollar.
The GBP/USD exchange rate was off to a weak bullish start on Tuesday as the U.S dollar loses some ground, thus aiding the Pound Sterling’s gains. The weak bullish attempts highlight the impact of the cautious investor approach on the U.S dollar especially with the upcoming US core CPI data which analysts expect to be in the red. The data is expected to hurt the performance of metals and energy companies.
The GBP/USD is weak bullish but if the price maintains a bullish performance, then it will have to contend with key resistance levels at around 1.2486, 1.2425, 1.2503, and 1.2567. However, a bearish reversal might send the price down and support levels would be expected at around 1.2306, 1.2243, and the 1.2189 price levels.
The upcoming core CPI data for the month of April is expected to be less than appealing mainly because that was one of the months where economic activities were hugely affected by the coronavirus pandemic. The negative data might further weaken the U.S dollar’s performance, giving the Pound a chance to make some gains.
However, there is currently a lot of uncertainty regarding the performance of both currencies. The Pound Sterling may take some Ls due to the rising concerns regarding the Brexit situation. There is also the fact that the UK’s economy is also not out of the woods from the impact of the coronavirus which is still a threat.
There were previous reports that the UK government was gearing up towards economic reopening and further measures aimed at supporting the economy within the next few weeks. If the measures are executed and the country can contain the viral spread, then that would certainly lend upside potential to the GBP, thus resulting in a bullish performance for the GBP/USD currency pair.