The British Pound Could Not Stay Above the Monthly 1.2515 Mark
- The GBP/USD could not stay above the 1.2515
- A lower UK Manufacturing PMI this month
- Britain has the second-highest COVID-19 death toll in Europe
After reaching a four-week high, the British Pound has suffered a sell-off on the last day of April. Cable could not hold above the monthly resistance 1.2515 mark (red line). The bears took control and pushed the price towards the 100 simple moving average.
In the next few days, if the pound manages to break the 100 SMA and closes below it, it might reach the 1.1490 mark.
Confirmation of a bullish view among investors, the price could break the monthly level (1.2515) again and leave behind a false breakout.
On Friday, the UK Manufacturing PMI came in lower than expected down to 32.6 from 32.8 last month. This shows severe damage in Great Britain’s economy.
Brexit concerns resurfaced again last week, which could have been another factor that pushed the pound into the negative territory.
“The two sides have been unable to find a compromise on three main areas – the so-called level playing field guarantees of fair competition, governance and fisheries policy, according to the sources in Brussels and London”.
Prime Minister Boris Johnson postponed the easing of lockdown measures until the 5th of May where he will declare the government’s strategy on how the de-escalation will be implemented.
Next week, an interest rate decision will be revealed by the Bank of England. A lower interest rate will move the Sterling downward.
Keeping interest rates as they are could leave a very minor effect on the pound.
Between the government de-escalation plan and the interest rate decision, it is highly likely significant movement in the pound next week.