GBP/USD pressured towards 1.3000 amid Brexit and virus woes
|- GBP/USD licks wounds near Friday’s lows amid risk-off mood.
- Brexit talks ‘on knife-edge’, UK records 23K new coronavirus cases.
- Markets await fresh Brexit, virus and US stimulus updates.
GBP/USD extends losing streak into a third straight day on Monday, pressured by the downbeat market mood amid a rapid surge in coronavirus cases globally.
The UK itself reported 23,012 news cases on Sunday, with the highest COVID-19 infection rates continue to be seen in the North West, Yorkshire and The Humber and the North East. Meanwhile, the key European economies, including Spain, Italy and France, imposed partial lockdowns and stricter restrictions to contain the contagion.
Investors ran for safety in the US dollar amid the coronavirus resurgence, knocking-off the risk asset, the GBP. Meanwhile, looming uncertainty over the likely US fiscal stimulus deal, heading into the final week before the election, bodes well for the greenback. The US dollar index gains 0.15% on the day, now recovering to 92.91 from a daily low of 92.70.
Apart from the growing virus concerns, the cable remains undermined by the Brexit uncertainty, despite the resumption of the EU-UK negotiations last week. The main sticking point continues to remains over fisheries, with the French President Emmanuel Macron threatening over the weekend to retract from any Brexit deal that that “sacrifices” French fishermen.
In the day ahead, a lack of relevant macro news from both sides of the Atlantic will put the focus back on the Brexit, virus and stimulus developments. Meanwhile, the sentiment on the global markets will be closely followed.
GBP/USD technical levels
Immediate support is placed at 1.3007 (10 and 50-DMA), below which the 20-DMA at 1.2978 would come into play. To the upside, 1.3052 (pivot point) is the level to beat for the bulls. The next critical resistance awaits at 1.3069 (5-DMA).
GBP/USD additional levels
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