The GBP/USD price is crashing today as the market reacts to the latest covid virus strain in the UK, stimulus deal in the US, and the lack of progress on Brexit. The GBPUSD pair is down by more than 1%, becoming the worst-performing majors.
What happened: The pound sterling us falling mostly because of a new strain of covid in the United Kingdom that is spreading 70% faster than the original one. This has forced the Boris Johnson administration to announce another round of lockdown that will affect most people in England. Also, many European Union countries like Germany, France, and Italy have announced a ban on UK travellers.
What else: The GBP/USD price is also falling because of the breakthrough in the United States. In a statement yesterday, Speaker Pelosi and Mitch McConnel announced that the country had reached a new $900 billion stimulus deal. The funds will go towards businesses, vaccine distribution, and stimulus checks.
What about Brexit: The GBP/USD is also reacting to the lack of progress about Brexit. The two sides did not make any progress during the weekend. That increases the possibility that the UK will exit the EU without a deal, which will affect its overall growth.
What’s the GBP/USD forecast: On the four-hour chart, we see that the GBP/USD crashed to a low of 1.3340 today. It has moved below the 28 and 14 EMA while the RSI has moved from the overbought level of 70 to the current 25. Therefore, the pair will likely continue falling, with the next target being at 1.3300. There’s also a possibility of it pulling back up to about 1.3360.