Cable accelerated lower in European trading on Monday and hit new two-week low, on comments from UK chief medical adviser Whitty, who said that next few weeks of the Covid-19 pandemic will be the worst.
New highly infectious variant of the virus is spreading across the country, threatening for the worst period of pandemic and Britain needs to put all efforts in the weeks before the vaccines have had their effect.
Concerns about the spread of coronavirus in supermarkets are rising, as number of people breaches rules by not wearing masks while shopping that would further worsen the situation. Fading risk sentiment also weighs on pound, with raising signals of deeper correction after larger uptrend stalled at 1.3700 barrier.
Fresh weakness broke below 20DMA (1.3506) and pressuring 1.3461 pivot (Fibo 23.6% of 1.2675/1.3703/30DMA), break of which would generate fresh bearish signal.
Daily Kijun-sen offers solid support at 1.3419, guarding key points at 1.3310/04 (Fibo 38.2%/top of rising daily cloud). Rising bearish momentum on daily chart supports scenario, along with weekly stochastic reversing from overbought zone and fading bullish momentum.
Converging 5/10DMA’s in attempt to form bear-cross, mark solid barrier at 1.3566, which should maintain fresh near-term bearish bias.
Res: 1.3506, 1.3533, 1.3566, 1.3600
Sup: 1.3461, 1.3419, 1.3352, 1.3310
