GBP/USD tumbles toward 1.3400 as the US dollar rebounds
- US Dollar Index erases losses, climbs back to 90.30.
- Pound prints fresh lows across the board during the American session.
The GBP/USD failed to hold above 1.3500 and broke below 1.3470 falling to 1.3428, the new daily low. As of writing, it trades at 1.3445, almost a hundred pips below Thursday’s close.
The pound is among the worst performers in the currency market on Monday, under pressure following the Brexit deal. Going into the London fix, the pound printed fresh lows versus the US dollar and also versus the euro. At the same time, the US dollar recovered strength with the DXY climbing back toward 90.30.
A new negative for the pound was the latest headline on coronavirus cases. The UK reported a record of 41,385 cases with 357 deaths. The spread of the virus is intensifying offsetting optimism from the vaccination.
Regarding Brexit, there have been no surprises as European Union ambassadors approved “the provisional application of the EU-UK Trade and Cooperation Agreement as of January 1, 2021”. The UK Parliament is expected to pass it on Wednesday.
From a technical perspective, the intraday bias points to the downside in GBP/USD. A strong support is seen around 1.3430 suggesting that a consolidation below would expose 1.3400. On the upside, a recovery back above 1.3530 would alleviate the bearish pressure. On a wider perspective, cable is moving within an uptrend facing a barrier at 1.3600.
Technical levels