Search ForexCrunch
  • GBP/USD in bearish consolidation phase amid risk-off mood.
  • Coronavirus fears mount, UK’s new deaths highest since May.
  • Brexit and virus updates in focus ahead of US macro news.

GBP/USD looks to extend its downside consolidation phase below 1.3050 into the European open, as the US dollar clings onto the overnight gains amid broad risk-aversion.

With the major European economies considering nationwide lockdowns amid the relentless surge in coronavirus cases, the sentiment on the global markets remains tepid. The risk-off mood buoys the demand for the US dollar as a safe-haven at the expense of the risk assets such as the British pound.

The UK virus situation is no better, with the Kingdom having reported that the highest number of new deaths since May at 367 on Tuesday while new infections rose by 22,885.  The northern English town of Warrington moved into the highest level of coronavirus restrictions since Tuesday.

On the Brexit front, the EU’s Chief Brexit Negotiator Michel Barnier resumed talks with his British counterpart David Frost in London on Tuesday. Markets remain hopeful of a likely Brexit breakthrough, keeping the cable’s downside in check.

In absence of first-tier macro events from the UK docket, the focus will remain on the global virus statistics, Brexit updates and US data for fresh trading impetus.

GBP/USD technical levels

Immediate support is placed at 1.3006/09 (10 and 50-DMA), below which the 20-DMA at 1.2984 would come into play. To the upside, the bulls are testing the 5-DMA barrier at 1.3046. The next critical resistance awaits at 1.3081 (daily classic R1).

GBP/USD additional levels