GBPUSD moves higher as PM Johnson announces new coronavirus plan. BOE Haskel talks on negative rates

Technical Analysis

Author: Greg Michalowski | gbpusd

Trades at highest level since September 8

The GBPUSD is moving higher as Prime Minister Johnson announces new coronavirus plan. The plan will include 3 tiers, medium high and very high. The schools and retail will remain open, but for areas in the very high area, new restrictions would be imposed.

At the same time BOE Haskel is on the wires saying
  • We are keeping an open mind on suitability of negative rates
  • negative rates may hit bank margins but could be offset by positive effect for economy

Trades at highest level since September 8_

The traders are pushing the GBPUSD higher reaction to the plan.   Looking at the daily chart, the price is trading at the highest level since September 8 and is moving closer to the 50% retracement of the move down from the September 1 high at 1.30777. A move above would open the door for further gains from a technical perspective

Drilling to the 4 hour chart, the price has moved away from the swing high going back to going September 10 at 1.30339 today, and has moved above the topside trend line at 1.3061 more recently.  Stay above those levels is more bullish for the pair. 

GBPUSD on 4-hour chart

The markets seem to be positively reacting to the hopes for a coronavirus plan to stop the spread (and no lockdown) and the potential for more stimulus that might prevent further economic decline.  

At the same time, the USD has turned to the downside (higher stocks?).   The Nasdaq is now up over 200 points or 1.88%. The S&P is up 1.20%

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