GBP/USD falls sharply toward 1.3400 as dollar capitalizes on safe-haven flows

GBP/USD turned south after trading above 1.3500 earlier in the day.
British pound is struggling to find demand despite the upbeat Retail Sales data.
US Dollar Index is testing 96.00 as market mood sours.

Eren Sengezer FXStreet

The GBP/USD pair spent the Asian session in a relatively tight range near 1.3500 but came under strong bearish pressure during the European trading hours. As of writing, the pair was down 0.5% on a daily basis at 1.3420.

Earlier in the day, the data published by the UK's Offıce for National Statistics revealed that Retail Sales in October rose by 0.8% on a monthly basis. This reading came in higher than the market expectation for an increase of 0.5%. Although the initial market reaction helped the British pound gather strength, the negative shift witnessed in market sentiment forced the pair to reverse its direction.

DXY gains traction ahead of the American session

Reports of Austria going into a full lockdown due to the rising number of coronavirus cases revived concerns over the global economic activity slowing down in winter. US stock index futures turned south and the US Dollar Index climbed to 96.00 area, reflecting the dismal market mood.

There won't be any high-tier macroeconomic data releases featured in the US economic docket in the remainder of the day and the risk perception is likely to continue to drive the financial markets.

Meanwhile, Northern Ireland protocol negotiations are set to continue in Brussels on Friday and investors will keep a close eye on fresh Brexit headlines ahead of the weekend.

Key technical levels to watch for

GBP/USD

Overview
Today last price	1.3419
Today Daily Change	-0.0080
Today Daily Change %	-0.59
Today daily open	1.3499

Trends
Daily SMA20	1.358
Daily SMA50	1.3639
Daily SMA100	1.3723
Daily SMA200	1.3837

Levels
Previous Daily High	1.3514
Previous Daily Low	1.3464
Previous Weekly High	1.3607
Previous Weekly Low	1.3353
Previous Monthly High	1.3834
Previous Monthly Low	1.3434
Daily Fibonacci 38.2%	1.3495
Daily Fibonacci 61.8%	1.3483
Daily Pivot Point S1	1.3471
Daily Pivot Point S2	1.3443
Daily Pivot Point S3	1.3421
Daily Pivot Point R1	1.352
Daily Pivot Point R2	1.3542
Daily Pivot Point R3	1.357

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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