US Dollar Boosted, GBP/USD Breaks Down Support - US Market Open
USD: The concerns surrounding the spread of the coronavirus continues to drive sentiment and thus keep safe-havens underpinned. Consequently, the US Dollar trades above the 98.00 handle while high beta currencies (AUD, NZD, CAD) are modestly lower. As such, with little signs of material stabilisation in the number of cases being reported, safe-havens may remain better bid.
GBP: A deeper pullback in GBP/USD as it fails to recover, a break below the 1.3000 level leaves scope for a push towards January 20th low at 1.2962, which also coincides with trendline support. On the political front, Boris Johnson has given the green light for Huawei to have access to 5G networks, despite pressure from the US to block the company having access. With that said, market attention has quickly shifted to the potential strain this may cause between UK-US regarding trade talks. Looking ahead, Secretary of State Pompeo is scheduled to visit the UK tomorrow, while UK PM Johnson is due to arrive in Washington next week.
CAD: Despite OPEC’s best efforts to jawbone the market and signal that they are looking at potential deepening and extending production cuts, weakness across the oil complex persists. In turn, near-term risks remain tilted to the downside for the Canadian Dollar, particularly after the BoC’s recent dovish shift. On the topside, resistance is situated at 1.3218 (61.8% Fibonacci retracement).
Source: DailyFX, Refinitiv
Economic Calendar (28/01/20)
WHAT’S DRIVING MARKETS TODAY
- “British Pound (GBP) Latest: Trending Lower Amid Global Risk-Off Sentiment” by Martin Essex,MSTA, Analyst and Editor
- “Dow Jones, US Market Sell-off: Buy the Dip or Sell the Rip?” by Paul Robinson, Currency Strategist
- “Dow Jones & DAX Forecast: Key Levels to Watch Amid Coronavirus Risks” by Justin McQueen, Market Analyst
--- Written by Justin McQueen, Market Analyst
Follow Justin on Twitter @JMcQueenFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.