GBP/USD trims weekly losses and consolidates around 1.2950

  • GBP/USD bounces up from 1.2880 and consolidates around 1.2950.
  • The pound weakened against a stronger dollar amid COVID-19 fears.
  • BoE, Brexit and US elections will be the main drivers next week.

The pound sterling has returned above 1.2900 on Friday after bouncing from 10-day lows at 1.2880, to consolidate around 1.2950. The pair has settled halfway through the last weeks’ trading range, ahead of an eventful week.

BoE, coronavirus and US elections in focus next week

Cable lost ground this week, weighed by the dismal risk appetite with the second COVID-19 wave spreading through Europe and the market bracing for a contested US election next week. In this backdrop, investors have remained away from risk, which has reflected on a strong USD recovery.

With Germany and France having introduced lockdowns and regional confinements in Spain, the pressure on the UK government is mounting to implement stricter restrictions. A second lockdown is not been priced and might trigger a strong selling pressure on the GBP.

The event of the week, however, will be Bank of England’s monetary policy meeting, due next Thursday. Some analysts have anticipated an increase of the quantitative easing programme, which would have a negative impact on the pound, although the biggest shock would be the introduction of negative interest rates. This possibility, albeit unlikely, might send the pound tumbling.

Beyond that, the outcome of the US elections will undoubtedly trigger relevant price movements. The most probable outcome, Biden’s victory, is expected to have a negative pressure on the US dollar, anticipating the approval of a large stimulus package to support economic recovery. A contested election without a clear winner, however, might boost safe-haven demand and push the US dollar higher.

Technical levels to watch


Today last price 1.2954
Today Daily Change 0.0024
Today Daily Change % 0.19
Today daily open 1.293
Daily SMA20 1.2984
Daily SMA50 1.3001
Daily SMA100 1.2871
Daily SMA200 1.2708
Previous Daily High 1.3026
Previous Daily Low 1.2881
Previous Weekly High 1.3177
Previous Weekly Low 1.2895
Previous Monthly High 1.3482
Previous Monthly Low 1.2676
Daily Fibonacci 38.2% 1.2936
Daily Fibonacci 61.8% 1.297
Daily Pivot Point S1 1.2865
Daily Pivot Point S2 1.2801
Daily Pivot Point S3 1.272
Daily Pivot Point R1 1.301
Daily Pivot Point R2 1.309
Daily Pivot Point R3 1.3154




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