• GBP/USD witnessed some intraday selling on Tuesday and dropped to a three-day low.
  • Brexit woes, less hawkish BoE expectations continued acting as a headwind for sterling.
  • Rising US bond yields revived the USD demand and contributed to the intraday selling.

The GBP/USD pair retreated nearly 60 pips from the daily swing high touched during the early European session and dropped to a three-day low, around the 1.2235-1.2230 region in the last hour.

The latest Brexit-related development over the Northern Ireland Protocol has raised the risk of fresh tension between Britain and the European Union. In fact, the UK House of Commons on Monday voted 295 to 221 in favour of a controversial bill that would unilaterally overturn part of Britain's divorce deal from the EU agreed in 2020.

Apart from this, speculations that the Bank of England (BoE) will adopt a more gradual approach towards raising interest rates amid fears of a UK recession acted as a headwind for the British pound. This, along with the emergence of some US dollar buying dragged the GBP/USD pair away from over a one-week high touched the previous day.

The risk-on flow pushed the US Treasury bond yields higher, which, in turn, assisted the USD to reverse its modest intraday losses. That said, reduced bets for a more aggressive policy tightening by the Fed might hold back the USD bulls from placing aggressive bets and help limit deeper losses for the GBP/USD pair, at least for the time being.

The recent decline in commodity prices now seems to have eased concerns about the persistent rise in inflation. This, along with the worsening economic outlook, forced investors to reassess expectations for a faster policy tightening by the Fed. Hence, the market focus will remain glued to Fed Chair Jerome Powell's appearance on Wednesday.

The BoE Governor Andrew Bailey is also due to speak at the ECB forum in Sintra, Portugal on Wednesday, which would help investors determine the next leg of a directional move for the GBP/USD pair. In the meantime, traders on Tuesday will take cues from the US macro data - the Conference Board's Consumer Confidence Index and Richmond Manufacturing Index.

Technical levels to watch


Today last price 1.2238
Today Daily Change -0.0028
Today Daily Change % -0.23
Today daily open 1.2266
Daily SMA20 1.2356
Daily SMA50 1.2467
Daily SMA100 1.2859
Daily SMA200 1.3184
Previous Daily High 1.2332
Previous Daily Low 1.2238
Previous Weekly High 1.2324
Previous Weekly Low 1.2161
Previous Monthly High 1.2667
Previous Monthly Low 1.2155
Daily Fibonacci 38.2% 1.2274
Daily Fibonacci 61.8% 1.2296
Daily Pivot Point S1 1.2225
Daily Pivot Point S2 1.2184
Daily Pivot Point S3 1.2131
Daily Pivot Point R1 1.232
Daily Pivot Point R2 1.2373
Daily Pivot Point R3 1.2414



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

When is the Australian employment report and how could it affect AUD/USD?

When is the Australian employment report and how could it affect AUD/USD?

AUD/USD bears lick their wound at one week long, taking rounds to 0.6930 by the press time, as traders seek fresh clues amid the market’s indecision after the Fed Minutes and the recent Aussie Wage Price Index for the second quarter (Q2).


EUR/USD: Bulls have a bumpy road ahead, 1.0210 guards immediate recovery

EUR/USD: Bulls have a bumpy road ahead, 1.0210 guards immediate recovery

EUR/USD recovery remains sluggish at around 1.0180 as bulls approach the short-term key hurdles during Thursday’s Asian session. Even so, steady RSI and an upward sloping support line from late July challenge the bears. 


Gold reverses Fed Minutes inspired gains, $1,735 in focus

Gold reverses Fed Minutes inspired gains, $1,735 in focus

Gold remains pressured around two-week low, down for the fourth consecutive day. Fed Minutes signalled policymakers’ support for restrictive rates despite suggesting a retreat from faster rate hike before long. US data, economic fears added to the market’s favor for the US dollar, weighing on XAU/USD.

Gold News

Shiba Inu on fire, another price rally around the corner?

Shiba Inu on fire, another price rally around the corner?

Shiba Inu yielded nearly 50% to SHIB holders over the past week, outperforming Bitcoin and most other cryptocurrencies. Money services firm BitWallet listed Shiba Inu, boosting the meme coin’s adoption among users. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!