GBP/USD drops below 1.2400 as coronavirus woes UK diplomats
|- GBP/USD refrains to respect the previous day’s pullback moves amid coronavirus-led pessimism.
- UK’s death toll surges 27%, cases jump 14%, police pushed for strict lockdown.
- US data, virus headlines will be the key.
Recently pressured due to the coronavirus (COVID-19), GBP/USD drops to 1.2380 while heading into the London open on Wednesday.
With a ‘shocking’ 27% rise in the deaths due to the deadly virus, not to forget a 14% surge in the cases, the UK’s policymakers are struggling to justify their efforts in taming the pandemic.
While updating about the figures, Reuters said, “official figures showed confirmed cases rose 14% between Monday and Tuesday to 25,150 as of Tuesday at 0800 GMT, the third day of increases around that rate - slowing from around 22-24% last Thursday and Friday.”
As a result, the UK police are being pushed for stricter measures to make sure that the lockdown goes as planned. The Health Secretary Tim Hancock, as per the BBC, mentioned that Hospitals should use spare laboratory space to test NHS staff in England for coronavirus who are self-isolating. “The advice comes as the government faces growing criticism over a lack of testing for frontline staff,” the news mentioned.
Elsewhere, the fears of a double-digit contraction in the US Q2 2020 GDP weighed on the market’s risk-tone during the early Asian session.
The UK’s economic calendar is mostly empty and hence coronavirus updates will keep the driver’s seat till the US session. Then, the ADP Employment Change and March month activity numbers from the world’s largest economy will be important to watch.
Technical analysis
Despite its recent weakness, GBP/USD struggles to carry its strength beyond 21-day SMA while staying below 61.8% Fibonacci retracement of March month declines and 200-day SMA.
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