GBP/USD remains vulnerable near monthly lows, just above mid-1.2200s


  • GBP/USD remained under some selling pressure for the fifth straight session on Tuesday.
  • Fears about increased UK public spending, Brexit uncertainties took its toll on the pound.
  • Coronavirus jitters benefitted the safe-haven USD and further contributed to the downtick.
  • The set-up support prospects for a further near-term depreciating move to sub-1.2200 levels.

The GBP/USD pair edged lower through the early European session and was last seen trading near the lower end of its daily trading range, around the 1.2260-65 region.

The pair failed to capitalize on the overnight bounce of around 50 pips from monthly lows and Tuesday's early uptick to levels beyond the 1.2300 mark, instead turned lower for the fifth straight session.

The British pound remained depressed amid doubts over Britain’s ability to pay for a massive boost to public spending. The worries surfaced after the UK Prime Minister Boris Johnson promised to double public investments.

This comes amid persistent Brexit uncertainties, which coupled with weaker UK macro data took its toll on the sterling. The final report of the first-quarter GDP showed that the economy contracted by 2.2% QoQ as against 2.0% estimated.

On the other hand, the US dollar drove some haven flows as investors remain concerned over the continuous rise in the number of new coronavirus cases globally, which might trigger renewed lockdown measures to contain the spread.

The GBP/USD pair has now moved well within the striking distance of Monday's swing low, around mid-1.2200s, below which the downward trajectory could get extended towards sub-1.2200 levels, marking the lower end of a near three-week-old descending channel.

Moving ahead, market participants now look forward to the US economic docket – featuring the release of Chicago PMI and the Conference Board's Consumer Confidence Index. This followed by the Fed Chair Jerome Powell's testimony might produce some meaningful trading opportunities.

Technical levels to watch

GBP/USD

Overview
Today last price 1.2261
Today Daily Change -0.0038
Today Daily Change % -0.31
Today daily open 1.2299
 
Trends
Daily SMA20 1.2535
Daily SMA50 1.2413
Daily SMA100 1.2478
Daily SMA200 1.2691
 
Levels
Previous Daily High 1.239
Previous Daily Low 1.2252
Previous Weekly High 1.2543
Previous Weekly Low 1.2314
Previous Monthly High 1.2601
Previous Monthly Low 1.2076
Daily Fibonacci 38.2% 1.2304
Daily Fibonacci 61.8% 1.2337
Daily Pivot Point S1 1.2237
Daily Pivot Point S2 1.2175
Daily Pivot Point S3 1.2099
Daily Pivot Point R1 1.2375
Daily Pivot Point R2 1.2451
Daily Pivot Point R3 1.2513

 

 

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