GBP / USD remains above 1.3550 but fails to consolidate above 1.3600

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  • GBP / USD reversed an intraday decline to the 1.3550 zone, on a weak dollar.
  • The imposition of new COVID locks in the UK could limit the hikes.

He GBP / USD managed to bounce around 50 pips from the daily lows, and rose to 1.3607, but failed to hold above 1.3600. It had previously fallen to 1.3552.

The attempt to recover the dollar ran out of steam in the last hours, favoring the pair’s rebound. The DXY is falling and approached 89.50, although it remains above Monday’s low.

The The dollar’s rise on Monday afternoon had been driven by a fall in stocks. Optimism about the impact of the vaccine, and the expectation of economic recovery, collides with the advance of coronavirus cases and political uncertainty in the US (today there are elections in Georgia).

At UK, Prime Minister Johnson announced a new quarantine until mid-February. This raises expectations of more stimulus from the Bank of England. Finance Minister Rishi Sunak announced that more help is coming for companies to cushion the blow of the crisis.

Looking ahead to the next few hours, what happens on Wall Street will be relevant and can help determine the direction of the dollar. While expectations for the impact of the coronavirus and the new measures in the United Kingdom will also play an important role. With regard to data, the US manufacturing ISM for December will be published, being the most relevant data of the day. Wednesday and Friday will be the turn of the important figures of the labor market.

Technical levels

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