Sterling remains driven by the dollar and its safe-haven qualities, while UK economic data, ongoing trade negotiations and the British government's performance in the coronavirus pandemic all cap sentiment for the pound.
As the UK unwinds lockdowns in the hospitality nL8N2E15MX and entertainment sectors, with cinemas to open from July 4 nL4N2E12YV, experts are warning of a disastrous second coronavirus wave nL8N2E10WE.
Trade negotiations with the U.S. are on a lond road, with many significant issues to be resolved nL8N2E145W.
Brexit talks remain stalled, and the European Union's chief negotiator Barnier said October will be "the moment of truth", the deadline for EU ratification of a January 2021 deal. For now, both sides continue to prepare for 'no deal'.
Meanwhile, the International Monetary Fund's prediction of an even deeper global recession due to the pandemic nL1N2E1181 and U.S.
Federal Reserve warnings of a slow, halting economic recovery nL1N2E11KTnW1N2CX04Tleave the dollar a safe haven in risk-off markets.
Technically, GBP/USD reversed off the 1.2534 21-day moving average Wednesday, recording a bearish outside day, which suggests the June downward correction can extend.
The initial target is the 1.2337 June low, then 1.2249, 76.4% of the May-June rise. A close above the 21 DMA would undermine the downside bias.
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