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GBP/USD nosedived to fresh YTD lows amid a strong pickup in the USD demand while the UK government’s £330 billion package provided a much-needed respite for bulls, Haresh Menghani from FXStreet informs.

Key quotes

“A turnaround in the global risk sentiment allowed the US Treasury bond yields to stage a solid rebound. This eventually helped revive the greenback demand while the British pound was being weighed down by the UK government’s different stance on combating the coronavirus pandemic.”

“Tuesday’s mixed UK employment details failed to impress bullish traders, rather passed unnoticed amid growing market concerns over the economic fallout from the virus outbreak.”

“The cable managed to find some support near the key 1.20 psychological mark after the UK Chancellor Rishi Sunak announced £330 billion stimulus package.” 

“The uptick lacked any strong follow-through and runs the risk of fizzling out rather quickly in wake of Boris Johnson’s overnight comments, reiterating that the transition period would end as scheduled on December 31st.”

“It will be prudent to wait for some strong follow-through buying before confirming that a near-term bottom is already in place and positioning for any further near-term recovery.”