GBP/USD flirts with 1.3600 mark, lowest since February


  • GBP/USD witnessed some heavy selling for the fourth consecutive session on Tuesday.
  • Brexit woes, COVID-19 jitters continued acting as a headwind for the British pound.
  • A modest USD strength further contributed to the ongoing decline to multi-month lows.

The GBP/USD pair dropped to five-and-half-month lows during the mid-European session, with bears now awaiting sustained break below the 1.3600 round-figure mark.

The pair prolonged its recent downward trajectory from levels just above the 1.3900 mark and witnessed some follow-through selling for the fourth consecutive session on Tuesday. This also marked the sixth day of a negative move in the previous six days and was sponsored by a combination of factors.

The British pound was weighed down by Brexit woes amid reports that the UK will threaten this week to deviate from the Northern Ireland Protocol of the Brexit deal. Sources indicated that UK chief Brexit negotiator, David Frost, is set to unveil the government's proposed changes to the protocol.

Adding to this, a surge in infections in the UK caused largely by the highly contagious Delta variant of the coronavirus acted as a headwind for the sterling. In fact, UK reported 39,950 new COVID-19 cases, which, along with a modest US dollar strength, exerted pressure on the GBP/USD pair.

Investors remain worried about the potential economic fallout from fresh COVID-19 outbreaks. This was seen as a key factor that continued underpinning the safe-haven greenback, which got an additional boost from a goodish rebound in the US Treasury bond yields from multi-month lows.

Meanwhile, diminishing odds for an imminent Fed action in the near future held the USD bulls from placing aggressive bets. Moreover, slightly oversold conditions on intraday charts might extend some support to the GBP/USD pair and help limit any further losses, at least for the time being.

There isn't any major market-moving economic data due for release on Tuesday, either from the UK or the US. Hence, developments surrounding the coronavirus saga, the broader market risk sentiment and the USD price dynamics might produce some trading opportunities around the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3624
Today Daily Change -0.0052
Today Daily Change % -0.38
Today daily open 1.3676
 
Trends
Daily SMA20 1.3841
Daily SMA50 1.4003
Daily SMA100 1.3933
Daily SMA200 1.3699
 
Levels
Previous Daily High 1.3777
Previous Daily Low 1.3654
Previous Weekly High 1.391
Previous Weekly Low 1.3761
Previous Monthly High 1.4249
Previous Monthly Low 1.3787
Daily Fibonacci 38.2% 1.3701
Daily Fibonacci 61.8% 1.373
Daily Pivot Point S1 1.3628
Daily Pivot Point S2 1.358
Daily Pivot Point S3 1.3505
Daily Pivot Point R1 1.375
Daily Pivot Point R2 1.3825
Daily Pivot Point R3 1.3873

 

 

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