GBP/USD dives to fresh multi-week lows amid sustained USD buying


  • GBP/USD remained under some heavy selling pressure amid a broad-based USD strength.
  • The Fed’s hawkish turn, the risk-off mood continued boosting the safe-haven greenback.
  • COVID-19/Brexit jitters weighed on the British pound and contributed to the selling bias.

The USD buying picked up pace during the early North American session and dragged the GBP/USD pair to fresh multi-week lows, around the 1.3845 region in the last hour.

The pair extended this week's post-FOMC bearish breakdown momentum and remained under some heavy selling pressure on the last trading day of the week. This marked the sixth consecutive session of downfall – also the eighth day of a negative move in the previous nine – and was sponsored by a combination of factors.

Investors remain worried that the government's decision to delay the final stage of easing lockdown measures to July 19 could hinder the nascent economic recovery. The concerns were further fueled by Friday's weaker UK macro data, showing that the overall and core Retail sales declined 1.4% and 2.1%, respectively, in May.

This comes on the back of concerns about the EU-UK collision over Norther Ireland protocol, which continued acting as a headwind for the British pound. Apart from this, the prevalent strong bullish sentiment surrounding the US dollar was seen as another factor that contributed to the GBP/USD pair's downward trajectory.

The greenback remained well supported by the Fed's sudden hawkish turn and shot to over two-month tops. The already stronger buck got an additional boost after St. Louis Fed President James Bullard, speaking to CNBC, said that the Fed Chairman Jerome Powell officially opened taper discussion at the last meeting.

Meanwhile, a selloff in the global equity market further benefitted the greenback's relative safe-haven status, which, to a larger extent, offset a fresh leg down in the US Treasury bond yields. This, along with a sustained break below 100-day SMA, further aggravated the intraday bearish pressure around the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3849
Today Daily Change -0.0073
Today Daily Change % -0.52
Today daily open 1.3922
 
Trends
Daily SMA20 1.4131
Daily SMA50 1.4019
Daily SMA100 1.3937
Daily SMA200 1.3593
 
Levels
Previous Daily High 1.4009
Previous Daily Low 1.3896
Previous Weekly High 1.4191
Previous Weekly Low 1.4073
Previous Monthly High 1.4234
Previous Monthly Low 1.3801
Daily Fibonacci 38.2% 1.3939
Daily Fibonacci 61.8% 1.3966
Daily Pivot Point S1 1.3876
Daily Pivot Point S2 1.3829
Daily Pivot Point S3 1.3763
Daily Pivot Point R1 1.3989
Daily Pivot Point R2 1.4055
Daily Pivot Point R3 1.4102

 

 

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