GBP/USD plummets to 1-week lows, below mid-1.2900s amid broad-based USD strength


  • GBP/USD witnessed some heavy selling on Wednesday amid a strong pickup in the USD demand.
  • Worries over rising COVID-19 cases and fresh lockdown restrictions benefitted the safe-haven USD.
  • Brexit uncertainties further took its toll on the British pound and contributed to the steep decline.

The GBP/USD pair continued losing ground through the mid-European session and tumbled to fresh one-week lows, just below mid-1.2900s in the last hour.

Following the previous day's modest bounce, the pair came under some renewed selling pressure on Wednesday and prolonged this week's retracement slide from the 1.3175 region. The downfall marked the fourth day of a negative move in the previous five was exclusively sponsored by a strong pickup in the US dollar demand.

The global risk sentiment took a hit amid the imposition of fresh restriction to curb a resurgence in new coronavirus cases. This, in turn, fueled concerns that economic growth will weaken once again and triggered a selloff in the equity markets, which provided a strong boost to the greenback's status as the global reserve currency.

The USD bulls seemed unaffected by growing wariness about the US presidential election. Nations polls have been indicating that Democrat candidate Joe Biden is ahead of incumbent President Donald Trump, though the gap is narrow in certain key swing states. Adding to the uncertainty is the possibility that the election outcome can be contested.

Apart from a broad-based USD strength, the UK's impending departure from the European Union kept the GBP bulls on the defensive and contributed to the heavily offered tone surrounding the GBP/USD pair. The steep intraday slide could further be attributed to some technical selling below the key 1.3000 psychological mark.

In the absence of any major market-moving economic release, either from the UK or the US, development surrounding the coronavirus saga will drive the market risk sentiment and influence the USD price dynamics. This, along with the incoming Brexit-related headlines will be looked upon for some meaningful trading opportunities.

Technical levels to watch

GBP/USD

Overview
Today last price 1.2953
Today Daily Change -0.0092
Today Daily Change % -0.71
Today daily open 1.3045
 
Trends
Daily SMA20 1.2979
Daily SMA50 1.3009
Daily SMA100 1.2866
Daily SMA200 1.271
 
Levels
Previous Daily High 1.308
Previous Daily Low 1.3001
Previous Weekly High 1.3177
Previous Weekly Low 1.2895
Previous Monthly High 1.3482
Previous Monthly Low 1.2676
Daily Fibonacci 38.2% 1.305
Daily Fibonacci 61.8% 1.3031
Daily Pivot Point S1 1.3004
Daily Pivot Point S2 1.2963
Daily Pivot Point S3 1.2926
Daily Pivot Point R1 1.3083
Daily Pivot Point R2 1.3121
Daily Pivot Point R3 1.3162

 

 

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