GBP/USD: Brexit woes, new covid strain hint bear’s return near 31-month high

GBP/USD eyes further losses after stepping back from May 2018 top on Friday.
Brexit talks remain difficult with significant differences suggesting no deal in 2020.
London, Southeast England enters Tier 4 lockdown, Europe, Turkey suspend UK travels.
US policymakers are near to the stimulus deal after a compromise on the Fed-limiting GOP proposal.

Anil Panchal FXStreet

Be it Brexit or a new strain of the coronavirus (COVID-19), early indicators suggest GBP/USD extend Friday’s pullback from the multi-month top while nearing 1.3400 during the early Monday’s Asian trading.

Having earlier heard that the Brexit talks between the European Union (EU) and the UK are going tough, the EU Chairman of the Foreign Affairs Committee David Callister tweeted that the European Parliament will not be in a position to grant consent to an agreement this year. While fisheries continue to be a tough nut to crack, the latest updates indicate additional differences over the level playing field.

Read: Brexit update: EP will not now ratify a trade deal in 2020

On the other hand, the new strain of COVID-19 led to the tier-4 activity restrictions in London and Southeast England. After announcing the lockdown, UK PM Boris Johnson called for an emergency Cabinet Office Briefing Rooms (COBRA) meeting to discuss the international travel bans and the freight flow impediments. During the weekend, Turkey and European countries including France and Italy have suspended travels with the UK.

Read: New Covid Strain: Several European countries cancel flights to the UK amid fast-spreading variant

Not only worries for Britain but the likely agreement over the US COVID-19 aid package may also lure the GBP/USD bears. Having recently reached a common field over the Fed’s role in the stimulus, the US Congress is up for voting on the much-awaited government help for Americans.

Looking forward, a light calendar and the year-end celebration mood is less likely to defy GBP/USD moves amid Brexit, virus and US stimulus headlines.

Technical analysis

FXStreet’s Ross J Burland indicates further downside by the GBP/USD prices while saying,

GBP/USD's heavy technical outlook from a near term perspective dominates for the last week before Xmas. A top-down analysis offers a comprehensive insight into both the near-term and medium-term trajectory for the pair.

Read: The Chart of the Week: No gift from Santa this year for GBP/USD bulls

Additional important levels

Overview
Today last price	1.3494
Today Daily Change	0.0000
Today Daily Change %	0.00%
Today daily open	1.3494

Trends
Daily SMA20	1.3386
Daily SMA50	1.3202
Daily SMA100	1.3116
Daily SMA200	1.277

Levels
Previous Daily High	1.3592
Previous Daily Low	1.3472
Previous Weekly High	1.3625
Previous Weekly Low	1.3225
Previous Monthly High	1.3398
Previous Monthly Low	1.2854
Daily Fibonacci 38.2%	1.3518
Daily Fibonacci 61.8%	1.3546
Daily Pivot Point S1	1.3447
Daily Pivot Point S2	1.3399
Daily Pivot Point S3	1.3326
Daily Pivot Point R1	1.3567
Daily Pivot Point R2	1.364
Daily Pivot Point R3	1.3688

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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