EUR/USD and GBP/USD hit hard in risk-off move
EUR/USD and GBP/USD suffer sharp losses at the open, yet it is the pound that looks most at risk as the new Covid-19 strain piles pressure on as Brexit talks reach a critical moment.
EUR/USD starts to regain ground after morning pullback
EUR/USD has slumped in early trade, with the pair falling back into an ascending trendline. With a wider uptrend in play, we would need to see $1.2125 swing low broken for a more bearish picture to emerge.
However, while we have seen a deep retracement, the fact we are starting to regain ground around the 76.4% Fibonacci level does highlight the potential for a bullish continuation from here.
GBP/USD tumbles as Covid and Brexit fears pile pressure on the pound
GBP/USD has seen sharp losses at the start of this crucial week, with another weekend of Brexit talks failing to reach any positive conclusion. However, the increasing likeliness of a no-deal Brexit has been accompanied by a new strain of Covid-19 which could see the UK locked down for months.
With Europe shutting their borders to the UK, it comes as no surprise to see the pound on the back foot. Brexit talks are scheduled to continue today, bringing the likeliness of further volatility for the pound. Price has broken below the $1.328 support level, bringing about a fresh bearish signal for the pair. The next key support level in view comes in the form of the $1.3134 swing low. Ultimately, we are looking at a currency pair that is going to remain volatile and unpredictable as it reacts to news in the lead up to the Brexit deadline.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
React to global volatility
Market volatility continues as coronavirus dominates the global agenda. Trade with us to take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and you’ll only pay a small fee if they’re triggered
- Round-the-clock assistance – our highly-skilled team are on hand to support you
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
