- GBP / USD found support at 1.2995 to return to levels above 1.3000.
- Risk aversion weighs on GBP despite upbeat Brexit news.
- GBP / USD remains positive above 1.2990 – UOB.
The pound is attempting to cut losses during the North American session on Monday after falling back to session lows at 1.2995 after a three-day drop from last week’s high at 1.3175. The pair has recovered to the 1.3000 level, although bullish movements remain limited.
The pound sinks amid the strength of the US dollar
The pound has resumed its downtrend this week, with the US dollar appreciating across the board and investors seeking refuge in safe-haven assets in a session of risk aversion. The rise in COVID-19 infections, with the United States and France reaching record levels of contagion and Spain announcing a new state of emergency, have crushed market sentiment.
In Europe, the positive news from the Brexit negotiations, which have lasted until next Wednesday, has failed to ease market concerns. EU Representative Michael Barnier will remain in London for intensive talks this week, prompting hopes for a last-minute deal to avoid a “hard Brexit.”
GBP / USD remains positive above 1.2990 – UOB
On the technical level, the UOB currency analysis team remains positive on the GBP while it is above 1.2990: “Bullish momentum is starting to wane, but only a breakout of 1.2990 (no change in the level of ‘support strong ‘) would indicate that the current bullish risk has dissipated. Meanwhile, to rejuvenate the current momentum, the British pound has to move and stay above 1.3120 in these 1 or 2 days or the odds of further strength of the pound they will diminish rapidly ”.
Credits: Forex Street
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