Advertisement
Canada markets close in 4 hours 23 minutes
  • S&P/TSX

    22,176.48
    +69.40 (+0.31%)
     
  • S&P 500

    5,253.52
    +5.03 (+0.10%)
     
  • DOW

    39,774.62
    +14.54 (+0.04%)
     
  • CAD/USD

    0.7384
    +0.0012 (+0.16%)
     
  • CRUDE OIL

    82.62
    +1.27 (+1.56%)
     
  • Bitcoin CAD

    96,251.34
    +2,381.78 (+2.54%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,236.60
    +23.90 (+1.08%)
     
  • RUSSELL 2000

    2,127.72
    +13.37 (+0.63%)
     
  • 10-Yr Bond

    4.1930
    -0.0030 (-0.07%)
     
  • NASDAQ

    16,400.09
    +0.57 (+0.00%)
     
  • VOLATILITY

    12.99
    +0.21 (+1.64%)
     
  • FTSE

    7,970.28
    +38.30 (+0.48%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • CAD/EUR

    0.6834
    +0.0029 (+0.43%)
     

GBP/USD Daily Forecast – British Pound Remains Under Pressure On Virus Fears

GBP/USD Video 22.09.20.

British Pound Loses Ground On Fears Of New Lockdown

GBP/USD has settled close to 1.2800 as the U.S. dollar is gaining ground against a broad basket of currencies in continuation of yesterday’s upside move.

U.S. Dollar Index rebounded from the support at 92.80 and moved above the resistance at 93.50 as fears about the second wave of coronavirus led to a sell-off in riskier currencies and boosted the U.S. dollar.

Britain was the epicenter of these fears as the country is set to impose stricter measures to contain the recent surge in the number of new cases.

Today, UK Prime Minister Boris Johnson is expected to encourage working from home and announce earlier closure times for pubs, bars and restaurants. The market fears that these are just the first steps on the road to serious containment measures which may include a lockdown.

ADVERTISEMENT

These fears put significant pressure on the pound since the British economy has not yet recovered from the first wave of the virus. If the new set of virus containment measures hurts the recovery, the Bank of England may have to introduce negative interest rates. In this scenario, GBP/USD will get hit hard.

Technical Analysis

GBP/USD has settled below the nearest resistance level at 1.2815 and attempts to gain more downside momentum.

The nearest support level for GBP/USD is located at 1.2750. This level was tested earlier in September but GBP/USD received significant support and quickly rebounded towards 1.3000.

This time, GBP/USD will have better chances to get below this level. RSI is in the moderate territory and there is plenty of room to gain more momentum. The 20 EMA has just crossed the 50 EMA to the downside, suggesting the continuation of the downside momentum.

If GBP/USD manages to settle below the support at 1.2750, it will head towards the next support level at 1.2650.

On the upside, GBP/USD needs to get above the nearest resistance level at 1.2815 to have a chance to rebound. The next material resistance level is located at 1.2925 although GBP/USD may also face some resistance at 1.2880. A move above the resistance at 1.2925 will open the way to the test of the 20 EMA at 1.2970.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

More From FXEMPIRE: