- The pound weakened, among the worst performers in the G10.
- The dollar remains firm, although it cuts gains in the last hours.
- GBP/USD sets new lows in two years.
GBP/USD is trading around 1.1680, firming below 1.1700 for the first time since March 2020. The pair posted a fresh low at 1.1642 before paring losses.
The losses of the pair on Monday are behind several factors, even technical. The break of 1.1700, meant to end a range of several days, which helped to accelerate the losses. The negative tone could be eased by a return above 1.1750, which would put GBP/USD back in the consolidation range. In the opposite direction, a bearish continuation would put the focus on the March 2020 low at 1.1410.
Another negative factor for torque is the dollar strength. On Monday, the greenback extended the upward trend, although it lost momentum in the last few hours and cut gains. The DXY climbed to decade highs at 109.47, before erasing much of the daily gains.
To complete a negative combo for the pound, downs on the equity markets particularly affect the currency. Wall Street does not recover from Friday’s lows and points to a new fall.
Monday is a bank holiday in the UK. In the US, the Dallas Fed manufacturing survey for August will be published. Fed Vice President Lael Brainard will make a public statement.
Technical levels
Source: Fx Street
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