GBP/USD Pares Losses As UK Gov Warns Of Further Restrictions, Fed Acts
Fiona Cincotta March 23, 2020 12:23 PM
Stricter measures to come. Fed announces unlimited QE
GBP/USD is trading lower in early trade, although off session lows, as UK government steps up its response to the coronavirus outbreak and the UK prepares itself for an Italian style lock down amid a jump in the number of coronavirus deaths.
Whilst the pound is maintaining losses of 1% versus EUR, GBP has pared some losses versus the USD. But this is a USD weakness story
The USD dropped sharply after the Fed committed to unlimited purchases of US Treasuries and agency mortgage backed securities in addition to setting up additional lending tools to struggling companies. The move cane after the Fed slashed interest rates to near zero last week. The Fed really has thrown the kitchen sink at the problem; however, it hasn’t stemmed the decline of cable.
Levels to watch
GBP/USD has picked up from session lows following the Fed action but is still trading lower. At the time of writing GBP/USD is trading -0.4% at $1.1610 as it looks to attack the 50 sma on the 1hr chart.
Resistance can be seen at $1.1635 (50 sma) prior to $1.1715 (today’s high) prior to $1.1745 (100 sma) and $1.1938.
Support can be seen at $1.1506 (today’s low) prior to $1.1435 (35 year low 19th March).
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