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Oct 26 - 11:55 AM

GBP/USD - COMMENT- Sterling Losing Luster As COVID, Brexit Move Back Into Focus

By Paul Spirgel  —  Oct 26 - 10:30 AM

Sterling received an early boost on rising expectations UK banks may soon make dividend payments to shareholders nL1N2HG0WI.
However, that euphoria has been dialed back as Brexit and COVID realities move back in focus.
Indeed, Monday's early sterling gains have evaporated, as the pound slipped from NorAm open highs near 1.3065 to session lows by 1.3004.

USD haven flows are lifting the dollar as pre-election U.S. COVID aid expectations fall and global COVID cases rise; the delay in further aid seen weighing on global growth.
Meanwhile, Brexit negotiations appear to be no closer to bridging significant gaps in key areas as the soft November 15 and hard December 31 deadlines quickly approach.

In any event, despite the dour Brexit and COVID outlook, GBP/USD bulls remain in control as the pair teeters near its recent trend high by 1.3177, and well above mid-September lows by 1.2676.

That said, amid persistent EU-UK Brexit and U.S. congressional aid intransigence, GBP/USD bears eye support by October 27's daily cloud twist, by 1.2980.
This is followed by DMA support by 1.2962, the 21-DMA, 1.2924, the 30-DMA and 1.2862 the 100-DMA.

Below the 100-DMA, which has trailed price since the mid-September lows, can put the lower 30-d Bolli by 1.2717 in sharper focus.

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Refinitiv IFR Research/Market Commentary


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