GBP/USD: The loss of the 1.3545 critical support line is a bearish sign

GBP/USD lost critical support at 1.3545 as the cable tumbled down due to Fed-related dollar strength and the UK's dire covid situation. Ramping up of Britain's vaccine campaign and further financial support could boost sterling but Monday's 4-hour chart is pointing to further losses for the pair, FXStreet’s Analyst Yohay Elam reports.

Key quotes

“Some in Westminster are mulling even tougher limits while others suggest stricter enforcement. In any case, the economy is undoubtedly struggling and sterling is suffering. Support may come from the government – Chancellor of the Exchequer Rishi Sunak is set to speak in parliament later in the day to discuss the state of the economy and potentially offer more fiscal relief.” 

“The UK is ramping up the rollout of vaccines, setting up special immunization centers. Britain approved three jabs, from Pfizer/BioNTech, Moderna and homegrown AstraZeneca. The UK administered vaccines to only around 2% of the population despite the earliest start in the Western world. That may be better than European countries, but frustratingly slow given the number of doses at hand and mounting pressure on hospitals.” 

“Support awaits at 1.3425, which, which was a cushion in late 2020, followed by 1.33, a stepping stone on the way up.”

“1.3445 now turns from support to resistance. It is followed by 1.3640, a swing high last week, followed by the recent peak of 1.3705.”