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  • GBP/USD plunges 130-pips and pressures 1.3300 blamed on geopolitical developments
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GBP/USD plunges 130-pips and pressures 1.3300 blamed on geopolitical developments

  • On Tuesday, the GBP/USD drops sharply 0.79% amid a risk-off market mood driven by the Eastern Europe war.
  • Market players ignored important UK and US macroeconomic data.
  • GBP/USD Technical Outlook: Downward biased and could accelerate on a daily close beneath 1.3300.

The British pound plummets as a risk-off market mood intensifies in the financial markets. Russia – Ukraine war headlines, intensifies in the last couple of hours. Ukraine Defense intelligence said that there are 300 Belarussian tanks near the Belarussian-Ukraine border while saying that Russia is preparing a deliberate provocation to justify the entry of those troops.

GBP/USD’s reaction to those headlines dropped from 1.3350s to 1.3298, reaching a fresh weekly low, following February 28 gap down towards 1.3307. At press time, the GBP/USD is trading at 1.3304.

UK and US released Manufacturing PMI data

On Tuesday, during the European session, the UK economic docket featured the IHS Markit/CIPS Manufacturing PMI for February, expected at 57.3, came at 58, higher than January’s. Across the pond, the US economic docket featured the first tranche of data in the week. The ISM Manufacturing PMI for February rose to 58.6, higher than the 58 estimated by analysts. ISM’s new orders advanced close to four months, reaching a five-month high of 61.7.

At 18:30 GMT, Bank of England’s Michael Saunders alongside Catherine Mann will cross the wires.

Late in the week, the UK economic docket would feature Markit PMI Services and Composite Index for February. On the US front, ADP employment report, Jobless Claims, ISM Non-Manufacturing, Fed’s Chair Powell, and Nonfarm payrolls may entertain GBP/USD traders amid the ongoing war between Russia-Ukraine.

GBP/USD Price Forecast: Technical outlook

The GBP/USD is downward biased. Price action in the last two months. Once the GBP/USD pierced the 200-DMA at 1.3733, cable began trending down, with two successive series of lower-highs and lower lows. Sterling gains on February 28 almost reversed entirely, and if GBP/USD bears achieve a daily close below February 28 low at 1.3307, it will exacerbate a move towards December 8, 2021 low at 1.3160.

That said, the GBP/USD first support level would be 1.3300. Breach of the latter would expose November 26, 2021, resistance-turned-support high at 1.3275, followed by 1.3200 and December 8, 2021 low at 1.3160.


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