GBP/USD targets fresh yearly high

Cable continued its impressive comeback of recent months as it aims for 1.32 and higher.  A target towards new highs for 2020 is on the cards.  The pair is currently at a five-month high and has moved back into a nice consolidation area from where it broke down in March this year.  Since then, cable has rallied from its 1.1490 low hit on March 20.  

The initial impetus was largely on the UK’s control of the coronavirus outbreak relative to the US.  The UK was seen to laggard a lot of Europe in its lockdown measures but still got the virus under control more quickly than the US. The US struggled with unity, a strong coherent message and which course of action to take to initially control the outbreak. 

Cable has since been helped by the essential money printing operation of the US Federal Reserve, the Fed saying earlier in the crisis that it would do whatever it takes.

BoE helps bullish sentiment

This morning the BoE was surprisingly upbeat on the UK economy or at least less downbeat. It revised up its projections for 2020 from May, the quote “we do not immediately expect negative rates” certainly added to the immediate reaction seen in the markets.

Dollar bye bye!

Sterling cannot take all the credit though as the dollar weakness across the board continues.  Talks in Washington over a fifth virus-related aid package remain deadlocked. Jobless claims came in better than expected but the bearishness continued with tomorrow's payroll number now in the crosshairs.

GBP/USD technical levels to watch

Technically some good resistance levels close by with 1.32 figure looking imminent, 1.3245 the Fibonacci 61.8% retracement from the April 2018 high to the March 2020 low. Taking those out brings the price to 1.3284, Dec 31, 2019 high and 1.3515 high from December 2019.  On the other hand, the bullish tone will likely remain intact above 1.28.