GBP/USD flirts with daily low, just above 1.3400 mark

  • GBP/USD witnessed some selling for the second successive day on Monday.
  • Brexit woes acted as a headwind for the sterling amid sustained USD buying.
  • Fed rate hike bets, COVID-19 jitters held the USD near a multi-month peak.

The GBP/USD pair edged lower through the early part of the European session and dropped to a fresh daily low, around the 1.3420 region in the last hour.

The pair struggled to capitalize on Friday's modest bounce from the vicinity of the 1.3400 round figure, instead met with fresh supply on the first day of a new week. This marked the second successive day of a negative move and was sponsored by a combination of factors.

The deadlock over the post-Brexit arrangement in Northern Ireland and fishing rights overshadowed the prospects for an imminent interest rate hike by the Bank of England in December. This, in turn, continued acting as a headwind for the British pound amid sustained US dollar buying.

The key USD Index stood tall near multi-month highs amid growing acceptance that the Fed would be forced to adopt a more aggressive policy response to contain stubbornly high inflation. This was reinforced by elevated US Treasury bond yields, which continued underpinning the USD.

Apart from this, worries about surging COVID-19 cases further benefitted the greenback's relative safe-haven status and exerted some downward pressure on the GBP/USD pair. That said, the lack of any strong follow-through selling warrants some caution for aggressive bearish traders.

There isn't any major market-moving UK macro data due for release on Monday, while the US economic docket features the release of Existing Home Sales. Hence, the focus will remain on Brexit-related developments, which will influence the GBP and provide some impetus to the GBP/USD pair.

On the other hand, the US bond yields will drive the USD demand. This, along with the broader market risk sentiment should allow traders to grab some short-term opportunities around the GBP/USD pair.

Technical levels to watch


Today last price 1.3422
Today Daily Change -0.0021
Today Daily Change % -0.16
Today daily open 1.3443
Daily SMA20 1.3565
Daily SMA50 1.3631
Daily SMA100 1.3719
Daily SMA200 1.3835
Previous Daily High 1.351
Previous Daily Low 1.3408
Previous Weekly High 1.3514
Previous Weekly Low 1.3396
Previous Monthly High 1.3834
Previous Monthly Low 1.3434
Daily Fibonacci 38.2% 1.3447
Daily Fibonacci 61.8% 1.3471
Daily Pivot Point S1 1.3397
Daily Pivot Point S2 1.3351
Daily Pivot Point S3 1.3295
Daily Pivot Point R1 1.35
Daily Pivot Point R2 1.3556
Daily Pivot Point R3 1.3602



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