GBP/USD- Bulls have tested the potential targets what next ?

From past couple of days we are witnessing a downfall in the pair where bulls are doing their best but recently we have seen the strong buying in the pair once again where bulls did their best and bounced from the 14 EMA line i.e. 1.3000 level. The US dollar is gaining strength across the board after the dovish Fed meeting and ahead of US GDP. The UK is set to impose stricter quarantine regulations. Failures to hold a break of 1.3200 psychological magnet drag the quote towards The Cable surged to the highest since March 10 the previous day after the US dollar marked broad losses on the bearish FED However, the greenback’s latest pullback joins Brexit woes to trigger the pair’s profit-booking moves. Also weighing on the quote could be the market’s cautious sentiment ahead of the US second quarter (Q2) GDP figures.

 

Other than the Brexit woes, the coronavirus (COVID-19) is also challenging the UK, even if not so much as the US. The country is has been on its run to take major steps in taming the pandemic. In its latest efforts, as per The Guardian, the government is expanding its Covid-19 rescue loan scheme to cover small businesses on the edge of collapse, a move that Labour warned would come too late for many troubled firms. In a separate move, “the isolation period for anyone with symptoms of possible COVID-19 in the UK will be increased to 10 days from the current seven” as per Reuters’ report quoting The Telegraph newspaper.

 

Moving on, the UK’s car productions slump 42% YoY, the biggest drop since 1954 during the six months to June, as per the Society of Motor Manufacturers and Traders (SMMT) figures released by the BBC. Additionally, Beijing escalated its fight with London while saying that Hong Kong’s government would suspend agreements on mutual assistance for criminal matters, including extradition, with Britain, Canada and Australia.

Technical Analysis:-  From a technical perspective, we can see that pair is trading and moving above all the major and minor EMA lines and heading north side. The way bulls are reacting it seems like they are trying to approach the 1.3200 level in near term. The next approachable targets are 1.3250 and 1.3300 level. Odds are favoring the bulls and our bias remains bullish on the pair as long as 1.3000 level remains intact on a closing basis. An uptrend line is also lying and suggesting us to keep the bullish view and buy on dips is the advisable strategy.

 

Trade idea- Based on chart and studies above we would suggest to buy at 1.3100 target is 1.3150 and 1.3200 sl is 1.2950 level.

 

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