Good morning! Here is your Daily FX Research. Enjoy!
Currencies began the week on the backfoot due to harsher lockdown measures and the new strain of coronavirus. As long as vaccine efficacy rates do not come into question then the $900Bn US stimulus package should support major currencies in the near term.
GBPUSD
The new strain of the virus, harsher lockdown measures and boarder closures caused sterling to fall at the beginning of the week. With calls for an extension to the transition period to buy negotiators more time this could be more bullish for the pound. As we approach the December 31st deadline, if no deal and no extension start to become a genuine fear - this could lead to a huge move lower for sterling although this isn't my base case.
Technicals
As cable rallied off the 1.3200 area of support up to test 1.3500 where price found resistance where the bears took control.
As price corrected to 1.3300 there was a 4 hour area of support to look out for bullish evidence where price found support and is moving back up towards 1.3500 area of resistance. 1.3500 is a good target area for the longs who bought 1.3300 and an area to look for bearish evidence.
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