GBP/USD nears five-month low amid global rout, BOE minutes in focus


  • GBP/USD remains on the back foot for the fourth day in a row.
  • Coronavirus carnage continues, leads to cancellation of the next week’s EU-UK talks.
  • UK PM Johnson mark the pandemic as the “worst for a generation.”
  • BOE minutes might offer intermediate clues, virus headlines can dominate.

Amid the broad risk aversion, due to the coronavirus (COVID-19) woes, GBP/USD marks mild losses of 0.7% to 1.2560 while heading into the London open on Friday. In doing so, the Cable nears the lowest level in five months as Brexit pessimism adds to the UK’s worries.

With the widespread outbreak of the deadly virus, the UK PM Johnson considered it the worst for a generation while citing fears of the actual numbers being higher than that. The pandemic led to the cancellation of the EU-UK Brexit trade deal talks that were to begin in London from the next week. However, both sides showed readiness to produce legal reports in the meantime.

Even so, the EU Chief Brexit negotiator Michel Barnier doesn’t forget to criticize the UK while saying “very serious divergences” had emerged in this week’s talks, as per the UK Express.

Chancellor Rishi Sunak is expected to step back from the previously announced tax hike as the UK Telegraph said, “the previous tax-raising plans were shelved in light of the coronavirus crisis, a source familiar with Treasury discussions told The Telegraph.”

Across the board, the coronavirus-led risk aversion continues with intermediate pullbacks. The latest one came after the BOJ infused 700 billion Japanese yen. While portraying the same, the US 10-year treasury yields bounce back to 0.82% with S&P 500 Future rising 1.0%. However, stocks in Asia remain under pressure.

Given the present momentum largely directed by the virus updates, traders might pay a little heed to the US data. However, BOE minutes could offer a strong near-term direction after the central bank marked a surprise cut during the week. “Minutes are released at noon GMT from MPC's "special" 10 March meeting where they decided to coordinate the inter-meeting easing package announced Wednesday. Key will be any openness to further easing (QE, in particular), and their assessment of growth through the first half of the year--we think a recession is now likely,” said TD Securities.

Technical Analysis

GBP/USD sellers can keep aiming for October 2019 high near 1.2415 unless crossing the 61.8% Fibonacci retracement level of its September-December 2019 upside, currently at 1.2560, a break of which could challenge 200-day SMA level of 1.2710.

Additional important levels

Overview
Today last price 1.2556
Today Daily Change -12 pips
Today Daily Change % -0.10%
Today daily open 1.2568
 
Trends
Daily SMA20 1.2911
Daily SMA50 1.2988
Daily SMA100 1.299
Daily SMA200 1.271
 
Levels
Previous Daily High 1.2849
Previous Daily Low 1.2491
Previous Weekly High 1.3049
Previous Weekly Low 1.2741
Previous Monthly High 1.3204
Previous Monthly Low 1.2726
Daily Fibonacci 38.2% 1.2628
Daily Fibonacci 61.8% 1.2712
Daily Pivot Point S1 1.2423
Daily Pivot Point S2 1.2278
Daily Pivot Point S3 1.2065
Daily Pivot Point R1 1.2781
Daily Pivot Point R2 1.2994
Daily Pivot Point R3 1.3139

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD remains pressured after US data misses estimates

EUR/USD is trading closer to 1.1750, paring its recovery from earlier in the day as the safe-haven dollar is bid. US Consumer Sentiment missed estimates with 72 points in September. The financial woes of China's Evergrande are weighing on sentiment.

EUR/USD News

GBP/USD trades under 1.38 amid on UK data, dollar strength

GBP/USD is on the back foot, trading under 1.38 after UK Retail Sales figures disappointed with -0.9% in August, worse than expected. Brexit uncertainty and dollar demand weighed on the pair earlier. 

GBP/USD News

XAU/USD surrenders intraday gains, drops closer to $1,750 level

Gold struggled to preserve its intraday gains and dropped to the lower end of the daily trading range during the early North American session. 

Gold News

Experts say Ripple will win SEC lawsuit, which might propel XRP to new all-time highs

The latest development in the ongoing SEC vs. Ripple lawsuit is that documents are classified as privileged and blocked for public viewing. Though institutional investors are yet to take big bets on the altcoin in 2021, retail investors are actively trading in XRP.

Read more

US Michigan Consumer Sentiment Preview: Markets will have to look hard for positive signs

Consumer outlook expected to rebound to 72.2 in September. August’s 70.2 was the lowest since December 2011. Inflation and Delta variant wearing on US optimism. Markets face negative dollar risk from fading consumer optimism.

Read more

Forex MAJORS

Cryptocurrencies

Signatures