In US, the number of COVID-19 patients shows no sign of slowing down. US roughly recorded around 70000 new cases of virus per day for three days in-a-row as of today. Florida reported more than 15000 new cases in 24 hours on Sunday, which is the highest number since the record started. Out of 12.9 million cases, over 3.3 million are of US as of July 13, according to Johns Hopkins University.

“Rising corona virus cases are not positive but at the moment, markets seem to think that there is still some distance to a situation where an overflow of the medical system will force them to put restrictions on the economy,” told Mr.Yukio Ishizuki, senior currency strategist at Daiwa Securities.

“We’ve seen a rapid rebound after a rapid decline in various economic data. But looking ahead, the improvement could slow or we could even [see] a deterioration given the second infections,” told Mr.Masafumi Yamamoto, chief currency strategist at Mizuho Securities.

On Sunday, the UK Cabinet Minister Michael Gove told that Brexit transition will likely happen by the end of this year, irrespective of the type of agreement reached with the European Union (EU). Late in the day, BoE Governor Bailey is due to speak and could give some insight into what lies ahead on the monetary policy front. All these updates strengthens the pound.

GBP/USD 4 Hour Chart:

Support: 1.2572 (S1), 1.2520 (S2), 1.2474 (S3).

Resistance: 1.2669 (R1), 1.2715 (R2), 1.2766 (R3).

The rising case of COVID 19 cases creates a riskier market sentiment in US whereas BoE Governor Bailey speech is largely expected. we expect a bullish trend for GBP/USD.