GBPUSD rebound prevails
Gary Christie October 23, 2020 7:50 AM
Despite a strong dollar Thursday, an uptrend looks to be in play: Chart
The US Dollar was bullish against most of its major pairs on Thursday with the exception of the NZD. On the US economic data front, Initial Jobless Claims dropped to 787K for the week ending October 17th (870K expected), from a revised 842K in the week before. Continuing Claims fell to 8,373K for the week ending October 10th (9,625K expected), from a revised 9,397K in the previous week. The Leading Index rose 0.7% on month in September (+0.6% expected), compared to a revised +1.4% in August. Finally, Existing Homes Sales increased to 6.54 million on month in September (6.30 million expected), from a revised 5.98 million in August, a level last reached in mid-2006.
On Friday, Markit's U.S. Manufacturing Purchasing Managers' Index for the October preliminary reading is expected to rise to 53.5 on month, from 53.2 in the September final reading.
The Euro was bearish against most of its major pairs with the exception of the GBP. In Europe, Eurozone's Commission has reported the first release for October indicators on consumer confidence at -15.5 (vs -13.9 expected). separately, Germany's GfK Consumer Confidence Index for November was released at -3.1 (vs -3.0 expected). Distinctly, France's INSEE has reported October indicators on business confidence at 90 (vs 92 expected) and manufacturing confidence at 93 (vs 96 expected).
The Australian dollar was bullish against most of its major pairs with the exception of the NZD and CAD.
The GBP/USD fell 70 pips to 1.3079 in Thursday's trading making the pair one of the largest movers on USD strength however the longer term trend looks bullish. A rising trend line is in play from March lows. Support can be seen at the 1.2845 level. Look for a continuation higher and the uptrend to continue towards Dec highs around the 1.351 level as long as the pair does not break below the 1.2845 support level.
Source: GAIN Capital, TradingView
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