Analysis

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GBPUSD
Jan 7, 2021, 2:01 PM GMT
#Forex

Raging Bears at the Two Ends of the Cable

The GBPUSD pair currently finds itself at a particularly interesting situation as both the sterling and the U.S. dollar seem to be greatly affected by external pressures. On the one hand, the pound underwent a tremendous bullish run last year on Brexit optimism, culminating with the signing of a highly anticipated trade deal between the U.K. and the E.U.

Despite the British Government's best efforts to administer the coronavirus vaccine to the general population as soon as possible, the worsening epidemic conditions forced Boris Johnson and his cabinet to tighten the restrictions in the U.K. This, coupled with the now waning Brexit optimism, is already affecting the value of the pound.

On the other hand, the greenback began the new year on a somewhat downbeat note, being impeded by the surge in global demand for higher-risk securities that offer higher yields. In addition to these purely economic factors, the dollar was also affected negatively by civil unrest in the U.S. Despite all of these negative pressures, however, there is light at the end of the tunnel for the greenback.

It is already starting to gain positive momentum against other major currencies, albeit at a slow rate, which can be a precursor to a subsequent recovery. Moreover, this process could be further supported by the upcoming earnings season in a couple of weeks.

Profit & Loss
Short Term Long Term Net % Gains
+ - + -
0
0 0 39 PIPS
-0.29%
Short Term
+ -
0
0
Long Term
+ -
0 39 PIPS
Net % Gains
-0.29%

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