- GBP/USD breaks higher to test two-week highs at 1.2645.
- The US dollar drops across the board after a string of downbeat US indicators.
The sterling has broken higher, with the dollar depreciating across the board. The GBP/USD is extending its rebound from Wednesday’s low at 1.2390 to levels 1.8% higher in the mid-range of 1.2600.
US dollar falls on grim US data
The dollar is weakening against its main peers on Thursday, weighed by a string of bleak US macroeconomic figures. US Personal Spending contracted by 7.5% in March, the largest decline on record, while Personal Income dropped 2%. Furthermore, the weekly jobless claims increased by 3.8 million in the week of April 25th, increasing concerns about the impact of the COVID-19 shutdown.
The pound has managed to take advantage of US dollar weakness to break above the top of the last two weeks trading range, at 1.2520, extending its rally from Wednesday’s lows at 1.2390 to test April 14 highs at 1.2645.
GBP/USD testing mid-April highs at 1.2645
If the GBP/USD manages to confirm above the last two weeks’ high at 1.2520, the next target is April 14 high at 1.2645, before aiming to late February lows at 1.2730. On the downside, back below 1.2520, the pair might find support at 1.2390/1.2400 (April 27, 28 and 29 lows) before aiming towards 1.2290 (April 24 low)
GBP/USD Key levels to watch