Breaking: GBP/USD refreshes yearly low around 1.3300 on coronavirus, Brexit woes

• GBP/USD prints six-day downtrend to refresh 11-month low.
• Brexit war escalates between the UK and France, EU’s Šefčovič to visit London for further NI border talks.
• UK HSA announces technical meeting to brief over virus variant, fears of Fed rate hike at the wrong time add to the risk-off mood.
• Yields, Brexit and covid headlines are the key for fresh impulse.

GBP/USD extends the five-day downtrend towards refreshing 2021 low near 1.3300 heading into Friday’s London open.

The cable’s latest weakness could be linked to the broad market fears over the coronavirus variant and the Brexit woes. However, bears seem to wait for the outcome of European Commission's Brexit point person Maroš Šefčovič’s UK visit on Friday, not to forget the UK Health Security Agency (UKHSA) technical briefing to discuss the variant covid variant.

While portraying their disappointment from the fishing licensing rules, the French fishermen are ready to block the Channel Tunnel and major ports on Friday. The UK government has already urged the policymakers to not use illegal means but the same is less likely to stop the French outrage.

However, the London visit of EU’s Brexit officer Maroš Šefčovič may please the British diplomats should the parties agree over the Northern Ireland (NI) border protocol that shows positive progress of late.

Elsewhere, the Bank of England (BOE) Governor Andrew Bailey rejected inflation fears the previous day and tamed the hopes of the rate hike. It’s worth noting that the firmer UK jobs report, inflation data and the PMI figures have previously fuelled the chatters over the rate hike from the “Old Lady”.

On a broader front, fears that the Fed’s rate hike will be delivered at the wrong time weigh on the market sentiment and underpin the US dollar’s safe-haven demand. That said, the covid-19 woes spread outside the initial fear-zone of Europe on concerns relating to the variant, with a formal name of B.1.1.529, which is linked to South Africa and is immune to the vaccines. For the same, the World Health Organization (WHO) and UKHSA have called for special meetings on Friday.

Moving on, the results from Brexit talks and UKHSA will be crucial for the GBP/USD moves while the bears hold the reins.

Technical analysis

The 61.8% Fibonacci Expansion (FE) of the pair’s moves between November 03 and 18, around 1.3300 offers strong immediate support to the GBP/USD prices. Even if the sellers manage to conquer the psychological magnet, the stated channel’s lower line may act as an extra filter to the south, around 1.3275, before directing the quote towards the 78.6% FE level of 1.3240.