The GBPUSD is down slightly as investors react to news that Donald and Melania Trump have tested positive for Covid-19. The pair is down by more than 0.25% and is trading at 1.2860.
Donald Trump tests for Covid-19
Donald Trump becomes the most powerful figure to have tested for Covid-19. The other one was Boris Johnson, who tested and later recovered from the illness. Indeed, the British pound fell by more than 0.50% when he was diagnosed of the illness.
The challenge for Trump is that he is facing the voters in less than six weeks. With the virus, it means that he will not be able to campaign. Indeed, he has been holding large rallies in the past few months. As such, unless he recovers before the election, it will be the first time in modern years that the US has had a sick presidential candidate.
Brexit talks results
In addition to news about the Trump illness, the GBPUSD pair will react to Brexit news. Today, the eighth round of talks between the UK and the European Union will conclude in Brussels. While the two sides have significant differences, analysts believe that the talks will not end in disarray as in the recent past. Signs of a deal will be a positive thing for the UK and the GBP.
Notably, the talks will conclude a day after the EU announced that it was initiating a legal challenge against the UK. This is after the UK passed an Internal Market Bill, which breaks the law on Brexit.
GBPUSD technical outlook
The GBPUSD is trading at 1.2863, which is lower than this week’s high of 1.2974. On the four-hour chart, the price is along the 23.6% Fibonacci retracement level and is also slightly below the 25-day EMA. The pair also seems to be forming a head and shoulders pattern.
Therefore, the pair is likely to continue falling as bears attempt to move below 1.2800, an important psychological level. It is also the lowest level on September 30th. On the flip side, a move above 1.2974 will invalidate this trend.