The GBP/USD is sharply lower this “Freedom Day” Monday as investors appear spooked by the rise of the delta variant of the coronavirus amid the lifting of restrictions in the UK.
The conclusion of the Euro 2020 tournament, which had England as one of the venues, has worried the WHO experts, who described the gatherings at Wembley stadium and various viewing centres across the UK as potential superspreader events. The latest number of coronavirus new infections appear to confirm their fears, with 50,000 new infections reported on Friday (the highest since Mid-January).
There are widespread fears that the UK government may be acting prematurely and may have to reintroduce lockdowns if the numbers keep trending upwards.
Also spooking investors is the announcement that UK PM Boris Johnson and Chancellor of the Exchequer Rishi Sunak are in self-isolation after contact with new Health Secretary Sajid Javid, who has tested positive for COVID-19. The GBP/USD pair fell 0.49% as investors sought the safety of the US Dollar.
Technical Outlook for GBP/USD
The pair’s crash has blown off the support at 1.37463, with the price candle now testing new support at 1.36771. If this level gives way, 1.36117 becomes the new downside target.
On the other hand, a bounce on 1.36771 allows the price to retest 1.37463 as new resistance. Recovery on the pair has to follow a path that takes it above 1.38126, 1.38616 and 1.39000