untitled design

GBP / USD falls below 1.4100 level to four-week lows

  • GBP / USD fell for the third day in a row on Thursday.
  • Nervousness around Brexit and COVID-19 continues to act as a headwind for the British pound.
  • A modest USD strength further contributes to the intraday selling bias.
  • Technical selling below the 1.4100 level exacerbates the intraday decline.

The pair GBP/USD has seen strong sales at the start of the European session on Thursday and has fallen to four-week lows, around the 1.4075-70 region.

After a brief consolidation during the first half of trading action on Thursday, the pair has encountered fresh selling and has extended the previous day’s decline from near the 1.4200 level. The pound sterling is still Weighed down by the collision between the EU and the UK on the Northern Ireland protocol and talks to postpone further easing of the blockade measures in the United Kingdom.

Talks between UK Brexit Minister David Frost and European Commission Vice President Maros Sefcovic to resolve differences over the Brexit deal broke down without a breakthrough on Wednesday. In a further escalation of the dispute over the Northern Ireland protocol, the European Union warned of swift and firm action if the UK fails to meet its post-Brexit obligations.

This is in addition to speculation that the UK may delay plans to end the restrictions entirely on June 21 in light of the spread of the so-called Delta variant of the coronavirus. The combination of factors has continued to act as a headwind for the British pound. This, coupled with a modest strength in the US dollar, has put some downward pressure on GBP / USD and contributed to the current slide.

Meanwhile, the last leg of the sudden drop could be attributed to some technical sales below the 1.4100 level. A subsequent decline below the monthly lows, around the 1.4080 region, could set the stage for further weakness. That said, investors could refrain from opening new positions ahead of US consumer inflation figures.

GBP / USD technical levels

.

You may also like

Get the latest

Stay Informed: Get the Latest Updates and Insights

 

Most popular