GBP/USD: Darkest Before Dawn Or Is A No-Deal Brexit Real? Sterling Suffering May Extend

Outside the Brexit bubble, fears of lockdown in London – perhaps from Wednesday – are marginally weighing on the pound. On the other hand, the FDA’s recommendation to approve the Pfizer/BioNTech vaccine is positive for risk assets and adverse for the safe-haven dollar. Similar to Brexit, US fiscal stimulus talks are also stuck amid Republican resistance to approving a larger package – but contrary to negotiations on the other side of the pond, there is no deadline.

The calendar features US consumer sentiment, which is set to remain stable on relatively low ground. It comes as US COVID-19 daily deaths surpassed 3,000 once again and after jobless claims jumped to 853,000 in the week ending December 4.

Overall, it is almost only about Brexit for pound/dollar.

GBP/USD Technical Analysis

(Click on image to enlarge)

The recent downfall has been insufficient to push the Relative Strength Index on the four-hour chart to oversold territory. The RSI’s hovering above 30 allows for more falls. Bears also benefit from cable’s fall below the 200 Simple Moving Average, after losing the 50 and 100 SMAs.

Some support is at the new low of 1.3184. It is followed by 1.3150, 1.3105 and 1.3060, all levels that were in play back in November.

Resistance is at 13225, a swing low from early in the week, followed by 1.3290 and 1.3325.

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