GBP/USD struggles near daily lows, below mid-1.3600s

A combination of factors exerted pressure on GBP/USD for the second straight day.
The prevalent risk-off mood continued driving some haven flows towards the USD.
The imposition of fresh COVID restrictions in the UK further took its toll on the pound.

Haresh Menghani FXStreet

The GBP/USD pair maintained its offered tone through the first half of the European session and was last seen hovering near daily lows, around the 1.3640-35 region.

The pair extended the previous day's sharp retracement slide from the 1.3755-60 region, or fresh 32-month tops and witnessed some follow-through selling for the second consecutive session on Thursday. The prevalent risk-off environment continued driving some haven flows towards the US dollar and was seen as one of the key factors exerting pressure on the GBP/USD pair.

Given that a lot of positive news was already priced in the markets, investors turned cautious amid doubts about the timing and size of a new US stimulus package. Apart from this, dovish FOMC acted as a catalyst that prompted some aggressive selling in the equity markets. The Fed raised concerns about the pace of recovery amid the continuous surge in coronavirus cases.

On the other hand, the British pound was pressured by growing worries about the potential economic fallout from the imposition of fresh restrictions in the UK. In fact, the UK government announced new measures to clamp down on travel from 22-high risk nations. Adding to this, Prime Minister Boris Johnson indicated that COVID-19 lockdown would last until March 8.

Meanwhile, the GBP/USD pair has now moved well within the striking distance of weekly lows, around the 1.3610 region touched on Tuesday. Sustained weakness below should be seen as a fresh trigger for bearish traders and pave the way for an extension of the ongoing corrective slide. The pair might then turn vulnerable to fall further towards the key 1.3500 psychological mark.

Market participants now look forward to the release of the Advance US Q4 GDP report, due later during the early North American session. This, along with the broader market risk sentiment, will play a key role in influencing the USD price dynamics. Apart from this, development surrounding the coronavirus saga might further produce some trading opportunities around the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price	1.364
Today Daily Change	-0.0042
Today Daily Change %	-0.31
Today daily open	1.3682

Trends
Daily SMA20	1.3638
Daily SMA50	1.35
Daily SMA100	1.324
Daily SMA200	1.2963

Levels
Previous Daily High	1.3759
Previous Daily Low	1.3659
Previous Weekly High	1.3746
Previous Weekly Low	1.352
Previous Monthly High	1.3686
Previous Monthly Low	1.3134
Daily Fibonacci 38.2%	1.3697
Daily Fibonacci 61.8%	1.3721
Daily Pivot Point S1	1.3641
Daily Pivot Point S2	1.36
Daily Pivot Point S3	1.3541
Daily Pivot Point R1	1.3741
Daily Pivot Point R2	1.38
Daily Pivot Point R3	1.3841

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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