GBP/USD slips back to mid-1.3700s as sterling struggles
GBP/USD has been on the back foot for most of Wednesday’s session, with the pair dropping from Asia Pacific levels above the 1.3800 level to trade either side of the 1.3750 mark in more recent trade. On the day, that means the pair has dropped about 60 pips or just under 0.5% and is now down about 0.4% on the week, putting sterling at the bottom of this week’s G10 FX performance table.
Driving the day
There does not appear to be any fundamental catalyst explaining recent selling in sterling or why GBP is now the underperforming G10 currency on the week. Indeed, the near-term economic outlook in the UK looks to be amongst the strongest in the G10, with the country’s vaccine rollout racing ahead, infection rates dropping and the country moving along its reopening plan as expected – on this latter point, UK PM Boris Johnson announced that the UK will move to stage two of lockdown easing on 12 April on Monday, which will involve most businesses being able to reopen their doors to the public, aside from indoors hospitality. This is expected to provide a material boost to the economy.
GBP/USD analysis: Respects pattern
On Wednesday morning, the GBP/USD confirmed that it would trade in the borders of the recently discovered channel up pattern. It did so by respecting the lower trend line of the pattern and recovering from it. In theory, the pair should now continue to surge in the pattern's borders until it would reach the upper trend line of the channel.
In the meantime, note that the currency exchange rate passed the support of the hourly simple moving averages, the weekly simple pivot point and the support zone of 1.3800/1.3820. It appeared that these levels were eventually passed despite holding for a short time.
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.