Boris Johnson is unfit to be prime minister – that has been the message from Dominic Cummings, the former all-powerful aide to the PM. The political scandal surrounding the handling of the pandemic has been grabbing attention and also weighing on the pound. Thursday’s testimony from Secretary of State for Health Matt Hancock may also complicate matters for the government.
However, a bigger drag on the pound comes from the virus – the variant first identified in India is of concern in Britain and beyond. France joined Germany in demanding quarantine from those arriving from the UK. While the vaccination campaign continues at full speed and the economy continues reopening, fears are hurting sterling. Read more…
The GBP/USD pair struggled to capitalize on its intraday uptick, instead witnessed some selling near the 1.4175 region, and finally settled with modest losses on Wednesday. In the absence of any fresh fundamental catalyst, a goodish US dollar rebound from the lowest level since January exerted some downward pressure on the major. The USD found some support from a modest uptick in the US Treasury bond yields. Adding to this, caution ahead of key US economic data coming out on Thursday and Friday helped to put a tentative floor under the greenback. Read more…
Cable stands at the back foot in European trading on Thursday and cracked important 1.4100 support (Fibo 23.6% of 1.3669/1.4238 rally), but so far lack strength to break lower and confirm signal. Wednesday’s bearish acceleration and close below 10DMA (1.4140) generated an initial bearish signal after Mon/Tue long-legged Dojis signaled strong indecision.
Significant loss of bullish momentum on daily chart and formation of 5/10DMA bear-cross weighs on near-term action. Firm break of a 1.41 handle would risk a deeper pullback through 20DMA (1.4057) and a test of key supports at 1.4018/00 (Fibo 38.2% of 1.3669/1.4233 / psychological) would damage larger bullish structure. Read more…
