Steadies After Monday's Sell-Off

Sterling crosses dived Monday as the UK imposed a nationwide lockdown across England after NHS leaders from the UK's constituent nations warned that hospitals are at the cusp of becoming overwhelmed. GBP has steadied in Asia and awaits further catalysts.

• Cable last trades -2 pips at $1.3569. Downside focus falls on the 20-EMA at $1.3492, followed by Dec 28 low of $1.3430. Bulls look to take out Jan 4 high of $1.3704 before targeting Mar 1, 2018 high of $1.3712.
• EUR/GBP sits at GBP0.9029, just above neutral levels. A break above Jan 4 high of GBP0.9049 would expose Dec 29 high of GBP0.9093. Bears look for a retreat under Dec 31 low of GBP0.8932 before taking aim at GBP0.8915, the low of Nov 27.
• GBP/JPY sits at Y139.97, a mere 2 pips better off. Losses past Dec 28 low of Y139.48 would turn focus to the 50-DMA at Y138.72. Conversely, a jump above Jan 4 high of Y141.32 is needed to revive the bullish case.
• Final UK Markit Services/Composite PMIs are due Wednesday, with Construction PMI coming up Friday. BoE Gov Bailey will speak Wednesday.