GBP/USD slips below 1.4100 mark, fresh session lows

COVID-19/Brexit woes failed to assist GBP/USD to capitalize on its modest intraday gains.
A softer tone surrounding the USD, upbeat UK jobs report also did little to impress bulls.
Weakness below the overnight swing lows will set the stage for a test of the 1.4000 mark.

Haresh Menghani FXStreet

The GBP/USD pair retreated around 35 pips from the early European session highs and refreshed daily lows, below the 1.4100 mark in the last hour.

The pair struggled to capitalize on its intraday positive move, instead met with some fresh supply near the 1.4130 region and was pressured by a combination of factors. The UK government's decision to delay the final stage of easing lockdown measures acted as a headwind for the British pound. In fact, UK Prime Minister Boris Johnson pushed back the timeline to end restrictions fully to July 19 from June 21.

The latest developments dampen prospects for a rapid UK economic recovery from the pandemic amid the spread of the so-called Delta variant. Apart from this, concerns about the EU-UK stand-off on the Northern Ireland protocol further undermined the British pound and capped any meaningful upside for the GBP/USD pair.

Bulls seemed rather unimpressed by the mostly upbeat UK jobs report, which showed that the unemployment rate dropped to 4.7% in April – in line with market expectations – from the 4.8% previous. This was accompanied by stronger wage growth data and a further decline in the number of people claiming unemployment-related benefits.

On the other hand, a fresh leg down in the US Treasury bond yields kept the US dollar bulls on the defensive, though did little to lend any support to the GBP/USD pair. That said, expectations of a slightly less dovish Fed should hold traders to place any aggressive bearish bets around the USD ahead of the FOMC decision on Wednesday.

The fundamental backdrop supports prospects for further weakness. However, it would still be prudent to wait for some follow-through selling below the overnight swing lows, around the 1.4070 region before confirming the bearish bias. The GBP/USD pair might then accelerate the slide towards challenging the key 1.4000 psychological mark.

Technical levels to watch

GBP/USD

Overview
Today last price	1.4098
Today Daily Change	-0.0013
Today Daily Change %	-0.09
Today daily open	1.4111

Trends
Daily SMA20	1.4156
Daily SMA50	1.4005
Daily SMA100	1.3928
Daily SMA200	1.3577

Levels
Previous Daily High	1.4124
Previous Daily Low	1.407
Previous Weekly High	1.4191
Previous Weekly Low	1.4073
Previous Monthly High	1.4234
Previous Monthly Low	1.3801
Daily Fibonacci 38.2%	1.4103
Daily Fibonacci 61.8%	1.4091
Daily Pivot Point S1	1.4079
Daily Pivot Point S2	1.4048
Daily Pivot Point S3	1.4026
Daily Pivot Point R1	1.4133
Daily Pivot Point R2	1.4155
Daily Pivot Point R3	1.4186

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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