- Summary:
- GBPUSD pair declined after Boris Johnson was admitted in hospital for Coronavirus-related illness. What is the outlook for the pound?
The GBPUSD pair declined today as the market reacted to news that Boris Johnson had been admitted in hospital. The prime minister was diagnosed with the Coronavirus ten days ago and has been leading the country through a video link. In a statement, Downing Street said that he was in good spirit but decided to go to hospital for cautionary measures.
The number of Coronavirus cases has continued to rise in the United Kingdom, which is currently in a national lockdown. According to the National Health Service, the UK has confirmed more than 47k cases and almost 5,000 deaths.
The main concern now is that Boris Johnson’s health is deteriorating. In fact, a senior conservative MP told the Financial Times that it was against Johnson’s character to admit himself to hospital and suggested that most MPs were concerned about his health. Another analysis by The Guardian confirmed that he was indeed deteriorating. The piece said that most people with the disease fight the disease in the first week. If Johnson is unable to do his job, Dominic Raab, his minister of foreign affairs will stand in for him.
The UK is in a precarious state as the lockdown has exposed the country to significant economic risks. Bank like Lloyds, HSBC, and Barclays have scrapped their dividends while many retailers have skipped paying rent. The disease is also threatening the country’s important automobile industry.
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GBPUSD Technical Analysis
Looking at the four-hour chart, we see that the GBPUSD pair, which was previously rising hit resistance close to the current level of 1.2480. The pair is between the 38.2% and 50% Fibonacci Retracement level, which is drawn by connecting the highest and lowest swings in March. With the pair moving sideways, the levels to watch will be the current resistance at 1.2484 and the support of 1.2200. A new bearish trend could be formed if the pair moves below this important support.