- GBP / USD remains at the mercy of the dynamics of the US dollar.
- The UK’s easing of covid restrictions does not inspire GBP bulls.
- The daily chart suggests that the decline looks more convincing.
GBP / USD remains capped below the 1.3800 level, although it attempts a bounce from support near 1.3750 amid persistent upbeat sentiment around the USD.
Markets remain nervous after massive fund liquidation, benefiting safe-haven US dollar. Archegos Capital, a hedge fund that had significant positions in CBS / Viacom among other companies, was forced to liquidate Friday night in response to margin calls.
On the GBP side, the bulls ignore the easing of covid restrictions in the UK and higher vaccination rates compared to the European Union. Falling oil prices are likely to weigh on the UK’s FTSE 100 index, which weighs heavily on commodities, which in turn could put additional pressure on the pound.
Markets are now looking forward to broader market sentiment and USD price action for further signals as the economic calendar remains tight heading into NFP week.
GBP / USD: Technical perspective
From a short-term technical perspective, the path of least resistance for GBP / USD appears to be to the downside.
The pair remains trapped between the 50-day moving average and the 100-day moving average for the fifth day in a row on Monday.
The 14-day RSI is sloping lower below the midline, currently at 43, suggesting that bears could be targeting deeper losses.
Therefore, a test of the upward sloping 100-day SMA support at 1.3635 could be on the table.
On the other hand, acceptance above the 50-day SMA at 1.3836 is needed to reverse the current downside momentum.
GBP / USD daily chart
GBP / USD technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
