The GBP/USD currency pair failed to stop its 3-day losing streak and still trading below 1.2390 while representing 0.46% declines on the 4-hour timeframe. Sell-off came after the United Kingdom registered the highest death toll in Europe. The receding expectations of the government aid package also keep the currency pair under pressure.
Moreover, the broad-based US dollar recovery rally weighed on the cable pair. At the press time, the GBP/USD currency pair is currently trading at 1.2435 and consolidates in the range between the 1.2425 – 1.2450. However, traders are cautious about placing any strong positions as they are keenly awaiting for the upcoming final reading of April month UK Constriction PMI.
As per the latest report, the UK reported the highest death toll in Europe by rose above Italy’s 29,315 figures with 29,427. As in result, the Tory government get pressurized and could face additional criticism. As we know, the UK government is already criticized massively about the shortage of medical supplies, falling below testing targets, and a lack of clear guidelines for lockdown exit as well.
On the technical front, the GBP/USD pair has violated the upward channel on the 4-hour timeframe. The channel was supporting the pair around 1.2427 level, which Cable violated via closing a bearish engulfing candle. At the same time, the 50 EMA also extends resistance around 1.2425 area, and below this, the pair has the potential to drop until the next target level of 1.2318 level and even below this until 1.2246. Considering this, we should wait for a slight retracement in Sterling, and it’s worth placing a sell limited instead of entering a sell trade right away.
Entry Price: Sell Limit at 1.2418
Take Profit 1.2318
Stop Loss 1.2498
Risk/Reward 1.25
Profit & Loss Per Standard Lot = -$600/+$1000
Profit & Loss Per Micro Lot = -$60/+$100
