- On Tuesday, the GBP/USD pair falls sharply 0.79% amid a risk-off market mood fueled by the war in Eastern Europe.
- Market participants ignored important macroeconomic data from the UK and the US.
- GBP/USD Technical Outlook: Bearish bias and could accelerate on a daily close below 1.3300.
The GBP slumps as risk-off market sentiment intensifies in financial markets. The headlines of the war between Russia and Ukraine intensify in the last hours. Ukrainian Defense Intelligence said there are 300 Belarusian tanks near the Belarusian-Ukrainian border and said Russia is preparing a deliberate provocation to justify the entry of those troops.
GBP/USD’s reaction to those headlines was to drop from 1.3350 to 1.3298, reaching a new weekly low, after the break on February 28 to 1.3307. At press time, GBP/USD is trading at 1.3304.
UK and US? manufacturing PMI data released
On Tuesday, during the European session, the UK economic docket released the IHS Markit/CIPS Manufacturing PMI for February, expected at 57.3, came in at 58, higher than January. Across the pond, the US economic docket presented the first tranche of data for the week. The ISM manufacturing PMI for February rose to 58.6, above the 58 forecast by analysts. ISM new orders advanced nearly four months, hitting a five-month high of 61.7.
At the end of the week, the UK economic docket would present the Markit PMI Services and Composite index for February. On the US front, ADP Jobs Report, Jobless Claims, ISM Non-Manufacturing, Fed Chair Powell, and Non-Farm Payrolls may entertain GBP/USD traders amid of the ongoing war between Russia and Ukraine.
GBP/USD Price Forecast: Technical Outlook
GBP/USD is biased lower. Price action in the last two months. Once GBP/USD pierced the 200 DMA at 1.3733, the cable started to trend down, with two successive sets of lower highs and lower lows. British pound gains from Feb 28 are almost completely reversed, and if GBP/USD bears achieve a daily close below Feb 28 low at 1.3307, it will exacerbate a move towards Dec 8 low. 2021 at 1.3160.
That said, the first support level for GBP/USD would be 1.3300. Failure of the latter would expose 26th Nov 2021 resistance turned support at 1.3275, followed by 1.3200 and 8th Dec 2021 low at 1.3160.
Additional technical levels
Source: Fx Street
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