GBP/USD loses the grip and drops to 1.2850, fresh 2020 lows

GBP/USD tumbles to the mid-1.2800s, new yearly lows.
Increasing USD-buying keeps the pair under downside pressure.
UK CBI Industrial Trends Orders came in at -18 in February.

Pablo Piovano FXStreet

The increasing (and persistent) buying pressure around the greenback is putting its rivals under further downside pressure on Thursday, forcing GBP/USD to shed further ground and prints new YTD lows in the 1.2850/45 band.

GBP/USD in multi-month lows

Cable is trading in levels last seen in November 2019 near 1.2850 in response to investors’ increasing preference for the greenback, which has so far lifted the US Dollar Index (DXY) to fresh peaks in the area just shy of the 100.00 psychological mark.

The quid has managed to attempt a bull run to the mid-1.2900s earlier in the session after January’s results from the UK’s high street showed headline Retail Sales expanded 0.9% MoM and core sales rose at a monthly 1.6%.

Also adding to the upbeat UK docket, the CBI Industrial Trends Orders improved to -18 for the current month (from January’s -22 and -19 forecasted).

However, as said, the solid momentum in the greenback is enough to keep the risk-associated space under heavy downside pressure, offsetting any strength coming in from the data universe.

Later in the NA session, the Philly Fed manufacturing index will be in centre stage seconded by weekly Claims and the EIA’s report on US crude oil inventories.

GBP/USD levels to consider

As of writing, the pair is retreating 0.44% at 1.2858 and a breakdown of 1.2849 (2020 low Feb.20) would expose 1.2768 (monthly low Nov.8 2019) and finally 1.2688 (200-day SMA). On the upside, initial hurdle emerges at 1.3061 (55-day SMA) seconded by 1.3069 (weekly high Feb.13) and then 1.3183 (monthly high Feb.3).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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