GBP/USD has been rejected at the critical 1.3895 level in what could prove to be a decisive blow to its recovery. There may be more in store, according to FXStreet’s Analyst Yohay Elam.
“The most recent downside driver is China’s persistent pursuit of its tech companies. The curb against companies in the world’s second-largest economy is weighing on global stocks and supporting the safe-haven dollar.”
“In the UK, the government is contemplating raising taxes to pay for a new social care program, and that is pressuring the pound. More details are due later in the week about fiscal spending and also covid policy.”
“Coronavirus infections remain at an elevated level in Britain, and that is deterring consumers.”
“Pound/dollar has been rejected at the 1.3895 line once again. Without a break above that level, bulls are compromised. Beyond 1.3895, the next line to watch is 1.3950, and then 1.3985.”
“Looking down, support awaits at the daily low of 1.38, followed by 1.3775, then 1.3725 and 1.3675.”