GBP/USD drops further, hits fresh two-week lows near 1.2250
|- Pound extends losses amid risk aversion, worst G10 performer.
- Cable is having the biggest daily loss in a month, and it heads for lowest since April 6.
The recovery in GBP/USD was short-lived, and it resumed the downside. Recently cable printed a fresh two-week low at 1.2246. As of writing, it trades near the bottom, under pressure.
The pound is falling across the board on Tuesday affected by risk aversion. The impact of the coronavirus on the global economy remains the critical driver in financial markets. In the US, the Dow Jones is falling by more than 3%. Adding to the recent deterioration in sentiment, crude oil prices continue under pressure. The WTI barrel dropped from $21.50 to levels under $12.00.
Data released on Tuesday showed a significant decline in US Existing Home Sales while in the United Kingdom, employment data showed mixed numbers having no impact on the market.
Technical outlook
The pair lost critical support at 1.2400 earlier hours ago, intensifying the selling bias in the pound. It dropped back under the 20-day moving average that stands at 1.2380 and also below 1.2300. If the decline continues, support levels are seen at 1.2245/50, followed by 1.2230 and 1.2190. On the upside, 1.2335 is the immediate resistance and then 1.2400/05.
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