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Morning Meeting Forex: New Covid strain in Great Britain, GBP/USD: the pound opens a bearish gap

21/12/2020
Source : dailyfx.com
Categories: Index/Markets

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Key points of the article:

General context: The emergence of a new strain of Covid and the new Brexit failure are causing the pound to fall
Today's currency: GBP/USD: Bearish gap

on the pound

Currency Table-Time Horizon: Daily

Resistance

Support

Bias

Commentary

AUD/JPY

Bullish

78.8

78.1

Consolidation under resistance

AUD/USD

Bullish

0.7677

0.75

Overbought RSI

EUR/AUD

Neutral

1,642

1,604

Preserved support

EUR/CHF

Neutral

1,0877

1,066

Back above 1,0788

EUR/GBP

Neutral

0.929

0.8975

EUR/JPY

Bullish

127.1

125.7

Horizontal consolidation

EUR/USD

Bullish

1,255

1,201

MM13 in support to 1.2175

GBP/JPY

Neutral

140.35

137.2

Horizontal consolidation

GBP/ USD

Neutral

1.35

1,3285

Crossing resistance not confirmed

NZD/USD

Bullish

0.74

MM13

Feedback on MM13 + RSI Divergence

USD/CHF

Bearish

0.8985

0.87

USD/JPY

Bearish

104.75

103.2

Major support test

General context: The emergence of a new strain of Covid and the new Brexit failure are causing the pound to fall

Following the emergence of a new strain of coronavirus in England over the weekend, the pound is down this morning and safe haven currencies like the dollar and the yen are up.

We are waking up to the chaos in the UK travel sector, as Italy, the Netherlands and Belgium close their borders with the British, and other countries like France prepare to follow suit, amid the rapid spread of a mutant strain of the coronavirus in Britain that has seen the government abruptly cancel Christmas and increase restrictions. It was a tough weekend for the former state of the European Union, as Brexit trade negotiations missed a deadline yet again, while there are few signs that either side is ready to compromise. The pound is down this morning.

In the United States, by contrast, congressional leaders in Washington finally reached an agreement on a spending program of around 900 billion dollars to support the American economy, marking one of the largest economic rescue measures in the country's history. The House of Representatives is expected to vote on the pact today, then the Senate.
Today's currency: GBP/USD: Bearish gap

on the pound

The pound had broken through a significant resistance zone out of 1.35 that had worked as support on Friday. The bearish gap opened this morning, which is rare for currencies, is a technical element that invalidates this scenario for the time being

.

The cable fell back below the two moving averages at 13 and 34 periods. A return to the bullish slant is likely. As long as it is preserved, the pound can resume its progress and the current movement would only be a correction. A break in this upward support would be a bearish reversal signal

.

Evolution of the exchange rate of the pound sterling against the dollar in daily data:
Morning Meeting Forex: New Covid strain in Great Britain, GBP/USD: the pound opens a

bearish gap

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