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Mar 13 - 12:12 PM

GBP/USD - COMMENT-Sterling Extends String Of Lower Lows As Virus, EU Issues Weigh

By Paul Spirgel  —  Mar 13 - 10:30 AM

GBP/USD has put in a new 5-month low at 1.2454, just above weekly cloud base support, continuing its run of lower lows, lower highs that began on Monday nL1N2B60NH.
Low global growth, falling UK rates and an uncertain EU-UK trade future are all conspiring against sterling, while the dollar has reemerged as the safe haven of choice in the coronavirus maelstrom.
GBP/USD and UK risk in general are being exited as the familiar issue of Brexit and final-status trade agreement with the EU adds to virus-related angst.
EU negotiator Barnier noted "serious" differences nL8N2AY56Y in round-one talks.
As the second round of negotiations are set to begin those differences remain.
A draft of the EU's goals nL8N2B63II indicates Brusselsis seeking close ties with the UK and level playing field, while the UK wants more leeway.
With little for sterling bulls to cheer about, recent Spec long positioning is likely to have unwound considerably as the pound dropped seven big figures this week, and seems well on its way to Oct.
8's 1.2196 low.
As key moving averages and the daily cloud drift lower bulls need a close above the 200-DMA at 1.2709 to stem the bearish tide.


GBP Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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