GBP/USD Forecast: Brexit overshadowed by pandemic developments

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2991

The UK reported 24,701 new cases and 310 deaths in the last 24 hours.
Brexit talks continue between the EU and the UK without progress reports.
GBP/USD has lost the 1.3000 threshold and is at risk of falling further.

As fears spurred demand for the greenback, the GBP/USD pair fell to a fresh weekly low of 1.2916, later recovering to the current 1.2990 price zone. Broad dollar’s strength led the way this Wednesday, as a second wave of coronavirus is hitting Europe hard, the United Kingdom included. The kingdom reported 24,701 new cases and 310 deaths in the last 24 hours, with new restrictions imminent. In the Brexit front, the impasse continues. Talks are underway, although there are no reports on progress.

Data wise, the UK published the BRC Shop Price Index, which declined 1.2% YoY in September, after falling 1.6% in the previous month. This Thursday, the country will publish September money figures and Mortgage Approvals for the same month.

GBP/USD short-term technical outlook

The 4-hour chart for the GBP/USD pair shows that buyers defended the downside around the 200 SMA, but currently remains below a flat 100 SMA and a bearish 20 SMA. Technical indicators in the mentioned time-frame have recovered from intraday lows but then turned flat within negative levels, leaving the risk skewed to the downside.

Support levels: 1.2920 1.2870 1.2830

Resistance levels: 1.3010 1.3060 1.3100

View Live Chart for the GBP/USD

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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