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GBP/USD has been struggling amid rising coronavirus cases. Brexit hopes have been holding the cable up, but other concerns are piling.  Meanwhile, Tuesday’s 4-hour chart is showing that the currency pair is battling uptrend support, FXStreet’s Analyst Yohay Elam reports.

Key quotes

“COVID-19 cases continue rising in the UK and have remained elevated also on Monday – a day that usually sees a drop due to administrative delays over the weekend. The pandemic is gripping the northern hemisphere and weighing on the global economy. Sterling is struggling with Britain’s local lockdowns, while the dollar is benefiting from safe-haven flows.” 

“While several post-presidential debate polls have shown a steady lead for Joe Biden, critical high-quality surveys from battleground states are still awaited. Moreover, the Senate race remains closer. FiveThirtyEight’s model is pointing to only a 12% chance that President Donald Trump is reelected, while Republicans have roughly a 30% probability of holding onto the Senate. Markets currently prefer a large win for Democrats that would ensure a generous stimulus package and despite potentially market-unfriendly policies. Congress is now adjourned, meaning a relief deal is all but dead.” 

“Chief EU Negotiator Michel Barnier extended his stay in London for ongoing talks. However, as time passes by, the silence around the deliberations stops helping the currency and begins weighing on it. PM Johnson denied that he is waiting for the US elections to strike a deal with the EU. Resolving the issues of state aid and fisheries is more critical than a question of timing – at least that is the current notion in financial markets.” 

“Pound/dollar is trading above the uptrend support line that has been accompanying it since mid-October. The line is backed up by the 50 and 100 Simple Moving Averages. The uptrend support line comes out at around 1.3015 at the time of writing. It is followed by 1.2990, a low point on Monday. Resistance is at 1.3075, a high point on Monday, and then by 1.3125 and 1.3175.”