Credit: REUTERS/THOMAS WHITESept 22 (Reuters) - Sterling fell 0.8% on Monday, eradicating last week's hard-fought gains, as expanding coronavirus and lockdown fears weighed on the currency while supporting the dollar, which leaves key technical support around 1.2720 looking vulnerable again.
The UK government's coronavirus strategy has at times been confused during the pandemic, resulting in poor containment of the virus . Experts believe the UK now faces a soaring COVID-19 death rate unless it moves fast .
Prime Minister Boris Johnson will chair an emergency response meeting on coronavirus on Tuesday . An earlier closing time for pubs and eateries is likely and The Telegraph reports that Johnson wants Britons to return to working from home, if possible .
Monday's dip has reset the negative signals on the daily GBP/USD charts; 5, 10, 21 daily moving averages, 21-day Bollinger bands and momentum studies all head south. The 1.2659 falling lower 21-day Bollinger band suggests that technically the market is not oversold, so there is room for another leg lower.
Initial major support at 1.2721-1.2725, 61.8% of the June-September rise and the 200 DMA, looks vulnerable unless the USD swoons. A sustained break of the 21 DMA at 1.3074 is needed to end the downside bias.
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gbp sep 22https://tmsnrt.rs/35XKiPA
(Andrew Spencer is a Reuters market analyst. The views expressed are his own)
((Andrew.m.spencer@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
