- The dollar remains firm, rises for the sixth day and the DXY reaches the highest since 2017.
- GBP/USD continues in free fall without finding support.
- Growth data for the first quarter of the US is coming.
The GBP/USD is falling for the sixth day in a row and fails to find support. The pair is trading at the 1.2460 zone, the new low since June 2020.
GBP/USD weakness finds no support even in the best of moods in the markets. Stock markets in Europe and Wall Street futures show significant gains, after the presentation of results and with a view to the end of the month.
Thursday’s bullishness also doesn’t put a damper on the dollar, which is rising for the sixth day in a row. DXY rises 0.60% and trades at 103.60, at levels not seen since 2017. This advance occurs even despite the stability that Treasury bond yields are showing. The key remains the expectation of monetary policy from the Federal Reserve, which is expected to be more aggressive than that of the Bank of England and other central banks.
On Thursday in the US important economic data will be published that may have an impact. The most relevant will be the first estimate of GDP growth for the first quarter. Along with these figures, at 12:30 GMT the weekly report on jobless claims will be released and later on the Kansas Fed manufacturing index.
Technical factors?
The acceleration of the fall GBP/USD is not behind the weakness of the pound, but mostly a strength of the dollar. The pair is looking for support and to establish itself at a new equilibrium level, which for now does not seem to find it. The same goes for other crosses like the EUR/USD. In April, GBP/USD lost over 700 pips and is on track to be its worst month in years.
The 1.2480/85 area is relevant support and if it asserts below it, it would leave GBP/USD heading lower. The next major support could be found at 1.2400.
Technical levels
Source: Fx Street
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