GBP/USD Outlook: Sterling Crashes On New Covid-19 Strain Panic

British pound opened with 130-pips gap lower vs US dollar and collapsed 250 pips in early Monday’s trading, in a panic reaction on fears about a new strain of coronavirus.


The UK was on Monday shut off from much of Europe, as well as Canada and Israel after its closest allies cut transport ties that created a chaos for people and companies, just days before Britain leaves European Union.


Cable dipped to the lowest since Dec 11 in early Monday and cracked important Fibo support at 1.3262 (38.2% of 1.2675/1.3624 bull-leg).


The news soured near-term sentiment and threatening of further weakness as technical studies on daily chart weakened significantly.


Rising bearish momentum and daily moving averages (10, 20, 30 DMA) now in bearish configuration, support scenario, with break of 1.3262 pivot to accelerate bears towards supports at 1.3134 (Dec 11 trough) and 1.3100 (top of rising daily cloud).


Res: 1.3331, 1.3384, 1.3394, 1.3440. Sup: 1.3262, 1.3185, 1.3134, 1.3100.


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