GBP/USD drops to 1.3300 again amid thin FX market conditions


  • GBP/USD has dropped to 1.3300 in recent trade, around which it is currently consolidating.
  • No new news appears to have driven the move, though there has been an overarching pessimistic feeling regarding Brexit talks this week.

No new news is driving the move, but GBP/USD is back to fresh lows of the day and briefly fell below 1.3300, for the first time since Monday. Though price action is now consolidating back above the psychological level, the pair does seem to be testing this area with more aggression than before, something which is likely to be making the bears feel uncomfortable that a downside break could be coming up next.

As a reminder, market conditions are thin given the absence of most of the US participants due to a second day of Thanksgiving holiday celebrations. Although that normally is a precursor to rangebound trade, a lack of market depth can leave assets vulnerable to big moves.

Brexit pessimism (there has been no indication today that the EU and UK have moved any closer to a deal this week) is likely to be behind today’s downside. Indeed, GBP is far and away today’s worst-performing G10 currency, down 0.4% against the US dollar on the day versus AUD, NZD and EUR, which are all trading with gains of 0.45 against the US dollar.

In thin liquidity conditions, it only takes a few big bearish orders to drive the pair lower, and that looks likely to have been the case today, with month-end flows also likely to be a factor working against sterling.

GBP/USD testing the bottom of this week’s range and looking heavy

GBP/USD’s move lower to 1.3300 has taken the pair back to the bottom of recent day’s ranges. For now, cable is holding up at support in this area, but if the bottom of this week’s range were to go, that would open the door to a move lower towards Monday’s low just above 1.3260 and then onto last Thursday’s low around the psychological 1.3200 mark.

However, some may see this recent move lower as another opportunity to buy the dip, in which case GBP/USD could march higher again. In this scenario, the main levels to watch would be Friday’s 1.3380ish highs and this week’s highs around 1.3400.

GBP/USD one hour chart

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

GBP/USD retreats from new highs amid dollar strength

GBP/USD has fallen off the peak of 1.3719, the highest since 2018, amid fresh dollar strength. Optimism about the UK's vaccine campaign and lower cases boosted sterling earlier. The greenback awaiting Biden's first moves as President. 

GBP/USD News

EUR/USD falls toward 1.21 ahead of Biden´s inauguration

EUR/USD has been descending toward 1.21. President-elect Biden is inaugurated later in the day and hopes of stimulus are high after Treasury Secretary nominee Yellen's testimony. 

EUR/USD News

Gold: Bulls recapture 200-DMA ahead of Biden's inauguration

Gold prices are attempting to correct higher above 200-DMA. The metal cheers rising US inflation expectations amid hopes of a massive stimulus package under the incoming Biden administration. 

Gold news

Forex Today: Yellen's stimulus boosts sentiment ahead of Biden's inauguration, BOC, Bailey eyed

The market mood is cheerful with stocks and gold rising and the dollar retreating ahead of Biden's inauguration. Yellen has made the case for more stimulus, boosting sentiment. 

Read more

US Dollar Index extends the drop to the 90.30 area, focus on US politics

The US Dollar Index (DXY), which gauges the greenback vs. its main competitors, remains on the back footing so far this week and slips back to the 90.30/25 band.

US Dollar Index News

Forex MAJORS

Cryptocurrencies

Signatures