GBP/USD dives to one-week lows, below 1.3000 mark amid notable USD demand
|- GBP/USD came under some renewed selling pressure on Wednesday and refreshed weekly lows.
- Coronavirus jitters drove haven flows towards the greenback and exerted some heavy pressure.
- Brexit-related uncertainties took its toll on the British pound and further added to the selling bias.
The GBP/USD pair witnessed some heavy selling during the early European session and slipped below the key 1.3000 psychological mark, refreshing weekly lows in the last hour.
The pair continued with its struggle to gain any meaningful traction and was being capped by a combination of factors. The impasse on the matter of the future access of EU fishing fleets to UK waters has dampened prospects for an immediate breakthrough in Brexit talks. This, in turn, took its toll on the British pound.
On the other hand, the US dollar drove some aggressive haven flows amid growing market worries about an alarming pace of growth in news coronavirus cases in the US and Europe. Investors seem worried that renewed lockdown measures to curb the second wave of COVID-19 infections could prove detrimental for the already fragile global economy.
Apart from this, the disappointment over the next round of the US fiscal stimulus measures and the US political uncertainty dented the global risk sentiment. This was evident from a steep decline in the US equity futures, which forced investors to take refuge in traditional safe-haven assets and provided an additional boost to the greenback.
With the latest leg down, the GBP/USD pair now seems to have found acceptance below 200-hour SMA and seems vulnerable to slide further. Hence, some follow-through weakness towards intermediate support near the 1.2945 horizontal level, en-route the 1.2900 mark, looks a distinct possibility amid absent relevant market moving economic releases.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.