Fears that the coronavirus (COVID-19) resurgence will recall the UK’s national lockdown recently weigh on the pound. This ignores the US dollar’s latest corrective pullback amid a light calendar. Covid updates, Brexit news and the second-tier US data should be watched for near-term direction.

Tory government diplomats while citing the pressure to impose a national lockdown in England. The move, as spotted by the piece, takes clues from the recently rising COVID-19 figures as well as the update that two million people in West Yorkshire are moving into the highest level of coronavirus restrictions, as per the news. Also backing the government is the latest weekly surveillance report from Public Health England shows that the pandemic case rates in England are rising for all age groups except 10 to 19 year-olds.

And UK Prime Minister Boris Johnson-led army searches for the clues to combat the deadly virus and its economic impacts, the International Monetary Fund’s (IMF) managing director Kristalina Georgieva advises British finance minister Rishi Sunak to increase public investment and bolster welfare support for people who lose their jobs because of the crisis, as per Reuters.

Elsewhere, the British government refrains from backing down on the fisheries when it comes to Brexit negotiations with the European Union (EU). However, David Frost and the company also want progress in the talks. Hence, the deadlock continues to bore GBP/USD traders while praising the bears.

And as far as US is considered,  The dollar index (DXY), which tracks the greenback’s value against majors, is currently trading in a sideways manner around 93.85. On Thursday, the DXY rose by 0.59% to 94.10, the highest since Sept. 30, breaching the trendline falling from March 23 and May 18 lows.

The U.S. economy grew at a historic pace in the third quarter as the government injected more than $3 trillion worth of pandemic relief which fueled consumer spending, but the deep scars from the COVID-19 recession could take a year or more to heal.

GBP/USD 4 Hour Chart:

Support: 1.2862 (S1), 1.2799 (S2), 1.2718 (S3).

Resistance: 1.3007 (R1), 1.3089 (R2), 1.3152 (R3).

All the prevailing catalysts weigh on pound against greenback, we expect a bearish trend for GBP/USD.