GBP/USD faces a reality check, three reasons to fall

GBP/USD is dipping outside the uptrend channel and may risk a deeper fall, due to three reasons, in the opinion of FXStreet’s analyst Yohay Elam.

Key quotes

“Jerome Powell, Chairman of the Federal Reserve, said that the bank ‘crossed red lines’ to support the economy in times of trouble. Will the Fed now fume at the froth in stock valuations? Despite ongoing support, some suspect the bank will try to withdraw the punch bowl. That may drive the dollar up.”

“London reported no deaths for the first time. That will allow a quicker reopening of the economy, including non-essential shops on June 15. However, the optimism is based on notoriously rosy weekend figures. Monday's release is for infections and mortalities that occurred on Sunday. These figures tend to jump on Tuesday.”

“The fourth round of talks on future EU-UK relations ended as it began without a breakthrough. At some point, markets may lose hope that Prime Minister Boris Johnson can cut a deal with the bloc's leaders.”