Forex Market News

Pound dropped as Boris Johnson’s health got worse – FBS

Instruments to trade: GBP/USD, EUR/GBP, GBP/AUD, GBP/CAD

Almost two weeks ago Boris Johnson tested positive for the virus, yesterday his health deteriorated and he was placed in the intensive care. As a result, after such negative news the British pound plummeted dramatically today.

It created a political uncertainty in UK, as it would make things even more complicated than it was in such a fragile period for the country as struggling with the coronavirus and getting ready for future Brexit trade negotiations.

All the confidence that the British pound gained at the start of the week was immediately vanished. The market reacted so fast as the virus spread could be shrinking in the USA and Europe, and risk appetite of investors became stronger.

 Technical analysis

Let’s look at the EUR/GBP chart. The pair had been declining since March 19. However, it hit the 200-day Moving Average at the point of 0.8755 or 61.8% Fibonacci retracement level on March 3. Then it reversed and went upward. The resistant line is on 50% Fibonacci level or the 0.89 mark. The next one is on 38.2% or 0.905.

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