GBP/USD price gains halted at the 1.3200 resistance, its highest in five weeks, and profit taking sales pushed the pair to the 1.3061 support, and then returned fast to stability around the 1.3110 level in early Tuesday's trading. The pound may remain in a holding mode until details of the UK budget is announced tomorrow, Wednesday, as investors rely on in terms of announcing larger spending plans and stimulating the British economy from the consequences of Brexit and facing risks of the Coronavirus.
Latest statistics confirm that more than 113,000 people have been infected with the virus, with more than 3,900 people died, most of them in China. More than 62,000 people have already recovered. Italy recorded a significant jump in the number of people who have been infected with the virus, bringing the total number to 9,172 and 463 deaths, more than any country except China.
Cases were announced in more than half of the countries of the world. German Chancellor Angela Merkel, whose country announced more than 1,100 cases as of Monday, said, "We are working for a precious time, when scientists can search for drugs and vaccines." The country recorded two deaths. In Iran, state television said that the virus killed 43 more people, bringing the official death toll to 237, with 7,161 confirmed cases. But many fear that the scope of the disease is much wider there. In the United States, over 600 infected person and 26 deaths have been announced so far.
The decline in the dollar comes along with large sales of oil and global stocks, global markets tumbled due to concerns about the continuing economic impact of the Coronavirus. Expectations of a recession are reflected in oil prices, which fell by 30% when markets opened for trading on Monday. Long-term charts indicate that this was the largest decline in the value of crude oil since the Kuwait War in 1990.
According to the pair’s technical analysis: On the daily chart, the GBP/USD pair reached overbought areas, and it must be taken into account that the British pound is still weak in the current environment due to the British currency's dependence on the influx of foreign capital, a situation that is greatly reduced in the state of fear and anxiety that controls investor sentiment. The 1.3200 resistance is a good selling target until the important details of the UK budget are announced, and the pair’s gains will remain dependent on additional fears about the future of negotiations between the European Union and Britain. Despite the recent optimism, the difficult points of difference between them remain. The closest support levels for the pair are currently at 1.3090, 1.3000 and 1.2945, and the latest level paves the way for the bears to take over the performance again.
Today, the pair does not expect any important economic data, whether from Britain or from the United States.
