- GBP/USD extends Friday’s losses amid broad risk aversion.
- US President Trump criticizes China’s mishandling of the virus, threatens to end the trade deal.
- Tories under pressure to reveal lockdown exit plan, UK risks losing world-renowned science sector.
- A light economic calendar keeps qualitative catalysts in the driver’s seat.
GBP/USD drops to 1.2460, down 0.36% on a day, while heading into the London open on Monday. Other than the broad US dollar strength, amid US-China tussle, challenges to the UK PM Boris Johnson-led government also weigh on the Cable.
The US President Donald Trump fired shots against China for its mishandling of the coronavirus (COVID-19), while backing his arguments by an intelligence report. The Republican leader went on to use the pressure towards warning the dragon nation over the US-China trade deal if the later fails to buy US goods.
In response to the US claims, China’s Global Times said that US Secretary of State Mike Pompeo’s anti-China bluff strategy reveals an all-or-nothing mentality to fool US voters.
Looking at the UK’s pandemic stand, the Tory government is near to rollout health passports and will soon begin drug trials in the hospitals. However, the opposition is still criticizing the ruling party after the SKyNews reported, “Cabinet minister Michael Gove admits the government will have "made mistakes" in the early stages of the coronavirus outbreak.”
The British lawmakers are debating in the House of Commons on the Health Protection (Coronavirus, Restrictions) Regulations and are likely not to ignore comments from the World Health Organisation epidemiologist. Dr. Maria van Kerkhove told the BBC the UK needed to stay vigilant as it eases its coronavirus lockdown.
Also likely to gain fire from the opposition could be the UK’s tough stand against the EU as the Guardian mentions, “the future of Britain’s world-renowned science sector – and its ability to lead global research into Covid-19 – risks being fatally undermined if the UK crashes out of the EU without a trade deal by the end of this year.” Even so, the European Union (EU) is likely to remain pressured as the US and the UK are likely to have a good trade deal.
Amid all these plays, the market’s risk-tone sentiment remains heavy with the US stock futures flashing losses over 1.0% and helping the US dollar to stay strong across the board.
Moving on, the US-China trade stories, Brexit and virus updates could keep the Cable traders busy despite having a light economic calendar for the day.
Technical analysis
An ascending trend line from April 21, around 1.2410 limits the pair’s immediate downside ahead of diverting the bears towards the late-April low surrounding 1.2250/45. Meanwhile, a falling trend line from Thursday’s top, at 1.2515 now, can guard the pair’s recovery moves before highlighting 1.2600 on the bulls’ radars.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD accelerates losses to 1.0930 on stronger Dollar
The US Dollar's recovery regains extra impulse sending the US Dollar Index to fresh highs and relegating EUR/USD to navigate the area of daily troughs around 1.0930 in the latter part of Friday's session.
GBP/USD plummets to four-week lows near 1.2850
The US Dollar's rebound keep gathering steam and now sends GBP/USD to the area of multi-week lows in the 1.2850 region amid the broad-based pullback in the risk-associated universe.
Gold trades on the back foot, flirts with $3,000
Gold prices are accelerating their daily decline, steadily approaching the critical $3,000 per troy ounce mark as the Greenback's rebound gains extra momentum and US yields tighten their retracement.
Can Maker break $1,450 hurdle as whales launch buying spree?
Maker holds steadily above $1,250 support as a whale scoops $1.21 million worth of MKR. Addresses with a 100k to 1 million MKR balance now account for 24.27% of Maker’s total supply. Maker battles a bear flag pattern as bulls gather for an epic weekend move.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.