Breaking: GBP/USD falls below double-bottom, lowest since February on souring market mood
|GBP/USD has tumbled below 1.3670, the double-bottom that was formed early in the spring. It is trading at the lowest since early February, a five-month low.
Sterling is experiencing a free-fall on Freedom Day – when the UK has reopened the economy despite rising COVID-19 cases. The rapid spread of the Delta coronavirus variant in Britain and most of the world has soured market sentiment. The damp mood is boosting the appeal of the safe-haven US dollar.
The next significant level to watch is 1.3565, which was a low point in February, followed by 1.34. Above 1.3670, the resistance awaits at the previous July trough of 1.3730.
Britain has reported daily new infections of over 50,000 during several days, and one of the persons testing positive has been Health Secretary Sajid Javid. Prime Minister Boris Johnson has had to self-isolate due to his exposure.
Another factor weighing on the pound was a dovish comment made by Jonathan Haskel, a member of the Monetary Policy Committee. He rejected any early tightening at this point, and prefers seeing higher inflation. On the other side of the pond, the rapid increase in prices has been supporting the dollar in recent day,
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