- GBP / USD witnessed an intraday turnaround from around 1.3300 on Tuesday.
- Aggressive expectations from the Fed continued to prop up the USD and put pressure on the pair.
- Some subsequent sales below 1.3200 will set the stage for further losses.
The USD caught some deals early in the American session and dragged the pair GBP/USD to a new daily low, around the 1.3220-15 region in the last hour.
The pair struggled to capitalize on its modest intraday gains, instead finding new supply near the 1.3290 zone on Tuesday amid a modest pickup in demand for the US dollar. The growing market acceptance that the Fed would raise interest rates sooner rather than later to contain stubbornly high inflation continued to act as a tailwind for the USD.
Apart from this, a further recovery in US Treasury yields sustained the dollar and put downward pressure on the GBP / USD pair. The bulls failed to get a respite from the prevailing risky mood, which tends to undermine the safe-haven dollar, and largely ignored prospects for an imminent rate hike by the Bank of England.
With the last leg bearish, the GBP / USD has trimmed a significant part of the recovery gains overnight and has traded well near 1.3200. A convincing break below the latter will be seen as a new trigger for bearish traders and will set the stage for further losses amid lingering Brexit-related uncertainties.
In the absence of major economic releases to move the market, USD price dynamics will continue to play a key role in influencing the GBP / USD pair and will generate some short-term trading opportunities. Traders will follow the signs of US bond yields, developments surrounding the coronavirus saga, and overall market risk sentiment.
Technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
