The GBP/USD has recorded a huge slump on the first trading day of the Christmas week, as double headwinds battered the cable in early London trading.
The pair is currently down 2.07% as new restrictions came into effect, following the discovery of a new strain of the coronavirus that has prompted the Netherlands, Canada, Israel, Germany, and France to immediately suspend all flights and other transport connections with the UK. London and surrounding areas have been moved into a higher tier of restrictions, and the UK government has also aborted plans for a Christmas period lockdown ease.
Also pressuring the cable on Monday was less than optimistic comments from key players within the post-Brexit trade talks. Irish Foreign Minister Simon Coveney stated on Monday that fisheries remained an issue, commenting that the talks were “not in a good place”.
Technical Levels to Watch
The GBPUSD opened the trading week with a downside gap, which extended all the way down to the lower edge of the ascending channel. The daily candle found support at this channel and is now off intraday lows at 1.31877.
This move puts the 1.32663 price support at risk, along with the channel’s lower boundary. A breakdown of this area opens the door towards 1.31019, with 1.30554 and 1.29921 lining up as additional downside targets.
On the other hand, a bounce rescues the current support and puts 1.33193 on the watchlist for buyers. An advance from this level targets 1.33951, with 1.34765 and 1.35134 being the additional upside targets before the channel’s upper border poses a risk to further advance.
GBP/USD Daily Chart
