- GBP/USD faces stiff resistance at 1.3100
- Rising coronavirus cases put downward pressure on the cable
- Dollar index stays steady at mid-93.00s
Bears decided to double down on the GBP/USD short position at 1.3100, sending the pair down to 1.3023 after rallying high in the early hours of the European session. It had risen above 1.3100 after staying around 1.3080 for most of the Asian session.
The bears were encouraged by the lack of progress in Brexit talks and fears over the second wave of Covid-19 enforcing shutdowns in the UK. Yesterday saw the second-highest daily increase since early June in Corona cases, according to the report from Britain’s health ministry, adding up to a total 305,623 positive COVID-19 test results in the UK.
BOE Back in Focus
Bank of England will announce its interest rate decision and release the policy statement on Thursday. Analysts expect it to express caution over the economic risk from a second COVID wave and further pressure on growth due to the ending of wage subsidies – expected in the autumn.
The US dollar is staying healthy with the dollar index staying in the green above 93.5 and is not allowing GBP to gain further at its expense, further emboldening the pound-bears. More action can happen in the dollar after the release of the ISM-NY’s Business Conditions Index and the IBD/TIPP’s Economic Optimism, today.
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