GBP/USD trims Tuesday’s gains and falls below 1.3200

• GBP/USD’s failure to recapture 1.3300 exacerbated the move lower below 1.3200.
• Market sentiment is mixed as European equities fluctuate while US equities advance.
• Positive news from the Russia-Ukraine front could point to a ceasefire between the two countries.
• GBP/USD Price Forecast: Bias to the Downside as the pair heads towards 1.3100.

The pair GBP/USD declines for the second consecutive day on Thursday and falls below 1.3200 amid a risk appetite mood in the market, which generally favored the British pound, but the aggressive line of the US central bank and the Overall US dollar strength weighed on the pair. At the time of writing, GBP/USD is trading at 1.3173.

As mentioned before, the market sentiment turned sour lately. European indices closed Thursday’s session with losses, although US stocks remain higher. In the currency space, the dollar is holding firm around 98.89 times the US dollar index, approaching 99.00, while US Treasury yields rise.

The conflict between Russia and Ukraine is at the forefront of the headlines again, with reports that the two-day NATO summit is underway. According to a senior US administration official, US President Biden told NATO that he supported NATO’s troop surge on the Eastern Front. However, it is worth noting that there has been some positive news from Eastern Europe. Chief of the Ukrainian General Staff Andriy Yermak said he had made progress in ceasefire negotiations with Russia and expressed “careful optimism,” the Axio correspondent reported.

Kashkari and Evans of the Fed made statements

At the beginning of the North American session, the president of the Minnesota Fed, Neil Kashkari, expressed that there is a risk of exaggerating with rate hikes. Furthermore, he added that he sees neutral rates around 2%. Chicago Fed President Chris Evans later said the Fed’s first rate hike was the “first of many,” saying he is open to a 50bp hike “if necessary.”

Meanwhile, the UK economic docket presented the March Composite PMI for the UK, down to 59.7 from February’s 59.9 figure, although higher than the 57.8 forecast.

The US economic docket featured initial jobless claims for the week ending March 19, which fell the most since 1969. The reading was 187,000 lower than the 212,000 forecast. Later in the day, Markit PMIs for March were released, which were better than expected.

GBP/USD Price Forecast: Technical Outlook

GBP/USD is sloping lower, as indicated by the daily chart. Tuesday’s rally stalled around the Nov 26 low at 1.3275, although the pair broke through the 1.3300 mark on Wednesday as the 50 day moving average (DMA) is about to cross below the 100 DMA. , each at 1.3402 and 1.3400, respectively.

That being said, the first GBP/USD support would be December 8, 2021, with a low of 1.3160. A break of the latter would expose the 13 Nov 2020 daily low at 1.3105, followed by the lower trendline of a descending channel around the 1.3020-40 and 1.3000 region.