GBP price, news and analysis:
- GBP continues to weaken against both the safe-haven USD and the more middle of the road EUR, suggesting downward pressure remains.
- GBP traders are concerned about rising cases of the coronavirus delta variant in the UK and news that Prime Minister Boris Johnson is isolating.
- While there’s nothing new about the virus spreading in the UK, GBP/USD will likely continue to trend lower and EUR/GBP to trend higher for a while yet.
GBP/USD downtrend to continue
GBP continues to look weak all round, trending lower against both the safe-haven US Dollar and the more mainstream Euro. That suggests further falls for GBP/USD and rises for EUR/GBP although, as always, there could be minor corrections within these longer-term trends.
GBP/USD Price Chart, Daily Timeframe (February 25 – July 20, 2021)
Source: IG (You can click on it for a larger image)
The declines in GBP are being blamed on rising cases of the coronavirus delta variant in the UK, news that Prime Minister Boris Johnson has been forced to isolate and concerns that the lifting of some Covid-19 restrictions Monday have come to soon. However, that makes little sense as there is nothing much new about the variant spreading, and the so-called Freedom Day had been well flagged in advance.
There could, therefore, be a minor correction near-term but the longer-term trends in both GBP/USD and EUR/GBP remain in place – lower and higher respectively – and will likely stay so unless the current bout of risk aversion ends swiftly and the European Central Bank is even more dovish than expected Thursday.
EUR/GBP Price Chart, Daily Timeframe (February 23 – July 20, 2021)
Source: IG (You can click on it for a larger image)
Note, though, that while GBP/USD has broken below trendline support, EUR/GBP has yet to break above trendline resistance and whether or not it does so will be important in determining the next big move in the cross.
— Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex
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