GBP / USD marks three-month lows below 1.3700

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  • The pound remains under pressure against the dollar amid risk aversion.
  • GBP / USD tests the 200-day moving average.

The GBP / USD extended the decline to 1.3688, reaching the lowest level since mid-April. The price then rebounded and is trading just above 1.3700 but remains under pressure with a strong bearish bias.

The pound falls for the third day in a row against the dollar. The greenback rose on almost all fronts driven by the fall in stock markets. Wall Street futures point to an open with falls around 1%, while European markets lose more than 2% on average.

The fall in Treasury yields this time does not detract from the dollar, as it is due to a greater demand for safe haven assets. Risk aversion among the major European currencies hits the pound the hardest.

In the UK, sAlthough today a large part of the restrictions were eliminated, there are fears about the Delta variant of the coronavirus. In turn, Bank of England policy is expected to remain well accommodative. Relevant UK data with retail sales and PMI will be released on Friday.

The decline in GBP / USD has reached the 200-day moving average, which is passing 1.3690 / 95. A close below could point to more weakness ahead. The looming support is at 1.3665, where the March and April lows are.

Technical levels

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