• GBP/USD witnessed some follow-through selling for the third successive day on Monday.
  • Bets for a more aggressive Fed, the risk-off mood underpinned the safe-haven greenback.
  • The fundamental backdrop supports prospects for a further depreciating move for the pair.

The GBP/USD pair extended its steady intraday descent and dropped to a fresh daily low, around the 1.3000 psychological mark during the first half of the European session.

Following an early uptick to the 1.3065 region, the GBP/USD pair met with a fresh supply on Monday and move back closer to the YTD low touched last week. This marked the third successive day of a negative move and was sponsored by sustained US dollar buying, bolstered by expectations for a more aggressive policy tightening by the Fed.

The markets seem convinced that the US central bank will hike interest rates at a faster pace to combat stubbornly high inflation. The bets were reaffirmed by hawkish comments from New York Fed President John Williams on Thursday, which was seen as a further sign that even more cautious policymakers are on board for bigger rate hikes.

This, along with concerns that a protracted Russia-Ukraine war would put upward pressure on commodity prices and the already high inflation, remained supportive of elevated US Treasury bond yields. Apart from this, the prevalent risk-off mood offered additional support to the safe-haven buck and exerted downward pressure on the GBP/USD pair.

That said, relatively thin liquidity conditions on the back of a holiday in Europe could help limit the downside for the GBP/USD pair amid absent relevant market moving economic releases from the US. Nevertheless, the bias seems tilted firmly in favour of bearish traders and supports prospects for a further near-term depreciating move.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3011
Today Daily Change -0.0049
Today Daily Change % -0.38
Today daily open 1.306
 
Trends
Daily SMA20 1.311
Daily SMA50 1.3262
Daily SMA100 1.3349
Daily SMA200 1.3522
 
Levels
Previous Daily High 1.3079
Previous Daily Low 1.3046
Previous Weekly High 1.3147
Previous Weekly Low 1.2973
Previous Monthly High 1.3438
Previous Monthly Low 1.3
Daily Fibonacci 38.2% 1.3059
Daily Fibonacci 61.8% 1.3066
Daily Pivot Point S1 1.3045
Daily Pivot Point S2 1.303
Daily Pivot Point S3 1.3012
Daily Pivot Point R1 1.3077
Daily Pivot Point R2 1.3094
Daily Pivot Point R3 1.3109

 

 

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