GBP/USD: Virus woes probe bulls targeting 1.2800
|- GBP/USD jumps 20+ pips at the week’s start amid hope of a Brexit deal.
- Calls of negative rates, virus woes recently play their roles.
- Risk news remains the key driver amid a lack of major data/events.
GBP/USD slips off intraday low of 1.2770 to 1.2765 amid the early Monday morning in Asia. The Cable surged from 1.2746 to 1.2768 at the week’s start as traders believed Brexit deal is still possible, based on the weekend headlines. However, fears that the coronavirus (COVID-19) is heading towards the national lockdown recalled the bears off-late.
A total social lockdown in Northern Britain…
The Times came out with the news suggesting that the UK government is up for an emergency ban on socializing. The news pulled GBP/USD back from the intraday high to 1.2755. However, renewed concerns about the Brexit keep the bulls hopeful.
Ahead of the ninth round of departure talks this Tuesday, the Confederation of British Industries (CBI) head, Carolyn Fairbairn, said during the weekend that a trade deal "can and must be made." On the other hand, the Irish leader, Taoiseach Micheál Martin, was pessimistic about the chances of a trade deal between the UK and the EU, per inews.
It should also be noted that the BOE member Silvana Tenreyro hinted favor for the negative rates during the latest appearances in Telegraph, reported by Reuters, as she said, “evidence on negative rates is encouraging.”
Read: A mix of weekend headlines for GBP traders
Looking forward, a lack of major data/events can keep traders worried but bulls are likely to have a bumpy road amid mixed cues.
Technical analysis
While September 11 low near 1.2765 offers immediate resistance, a daily close beyond June month’s high around 1.2815 becomes necessary for the buyers’ return. Meanwhile, a downside break of 1.2675 may take rest near July 10 tops surrounding 1.2670 ahead of targeting the July month low near 1.2480.
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