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Fundamental Forex Analysis

GBP/USD plummets to 2-week lows, around mid-1.2300s

  • Sustained USD buying kept exerting some pressure on GBP/USD on Tuesday.
  • Mixed UK employment details did little to provide any meaningful impetus.
  • Technical selling below 1.2400 mark further aggravated the bearish pressure.

The GBP/USD pair maintained its offered tone through the early European session and dropped to near two-week lows, around mid-1.2300s in the last hour.

The pair extended last week’s rejection slide from the very important 200-day SMA and remained depressed for the second consecutive session on Tuesday – also marking its fourth day of a negative move in the previous five.

The US dollar built on its recent strength and remained well supported by the global flight to safety, amid the ongoing downward spiral in crude oil prices and reports about the health of North Korean leader Kim Jong Un.

This comes amid the ever-increasing number of cases and deaths in the UK. The developments continued benefitting the USD’s relative safe-haven status against its British counterpart and turned out to be a key factor exerting pressure.

Meanwhile, Tuesday’s mixed UK employment details did little to impress the GBP bulls, rather passed largely unnoticed as the focus remains on developments surrounding the coronavirus saga and its impact on the global economy.

Apart from the mentioned factors, possibilities of some short-term trading stops being triggered on a sustained break below the 1.2400 round-figure mark further aggravated the bearish pressure and contributed to the pair’s intraday downfall.

Technical levels to watch

 

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