GBP/USD Forecast: New restrictions and Brexit jitters hit Sterling

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2889

EU’s negotiator Barnier said that the UK needs to agree to a level playing field.
The UK government lift the level of restrictions in the London area.
GBP/USD has lost the 1.2900 level, steeper decline at sight.

The GBP/USD pair has shed all of its Wednesday’s gains on the back of risk aversion, falling below the 1.2900 price zone, where it stands heading into the Asian opening. The British Pound suffer extra pressure from headlines indicating that the London area is moving into the high level of alert this Saturday, amid the sharp increase in new coronavirus contagions. This means that more than half of England's population will now be living under high alert restrictions.

Meanwhile, UK's chief Brexit negotiator, David Frost, reiterated that the UK wants to reach a trade deal with the EU. He later complained that the EU is no longer committed to working intensively. EU’s Michel Barnier, on the other hand, said that the Union would do everything possible to reach a deal, although he clarified that “not at any price.” Barnier repeated that the UK needs to agree to a level playing field if it wants access to the EU market. The UK won’t release relevant macroeconomic data this Friday.

GBP/USD short-term technical outlook

The GBP/USD pair trades near its daily lows and seems poised to extend its decline. The 4-hour chart, however, shows that the pair continued to meet buyers around a directionless 100 SMA, although the 20 SMA is gaining bearish strength above the current price. Technical indicators, in the meantime, hold within negative levels, reflecting the absence of buying interest.

Support levels: 1.2860 1.2815 1.2770

Resistance levels: 1.2940 1.2995 1.3040

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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