No new bad news on Brexit yet, and the statements by St. Louis Fed President James Bullard, that in the near future may require a reduction in rates, strengthened market expectations and put pressure on the dollar towards a decrease.
Also, the British pound found support in connection with optimism about trade relations with the United States after Brexit, especially after US President Donald Trump announced that the USA would have a very significant trade deal with the UK.
However, in the face of continuing British political uncertainty, since the hard-liner advocating Brexit, Boris Johnson is gaining momentum to become the next British Prime Minister, and this could later lead to a withdrawal without a deal, further strengthening of GBP is questionable.
Also today comes the British PMI in the service sector, as well as data from the US – ADP report on employment in the private sector and non-manufacturing PMI ISM, which may affect the prevailing rate.
GBP/USD Technical Analysis 05th June 2019
The British Pound started a decent recovery from the 1.2550 swing low against the US Dollar. The GBP/USD pair traded above the 1.2600 and 1.2620 resistance levels to start the recent recovery.
There was even a close above the 1.2650 level and the 50 hourly simple moving average. The pair traded as high as 1.2713 and it is currently consolidating gains. On the downside, there is a strong support forming near the 1.2680 level and a bullish trend line.
Moreover, the 38.2% Fib retracement level of the last wave from the 1.2641 low to 1.2713 high is also near the 1.2686 level to act as a support.
On the upside, if there is a break above the 1.2710 level, the price could accelerate above the 1.2720 and 1.2730 levels. The next main resistance for the bulls is near 1.2750.