GBP/USD falls below $1.32 on risk aversion
GBPUSD approaches key support a 1.3140 as risk aversion drives the pair lower. USD index trades above 99.00 for the first time since May 2020.
Share this:
GBP/USD falls below 1.32 on risk aversion
GBP/USD tumbles below 1.32 to a 14-month low as it comes under heavy selling pressure in the wake of USD strength and strong risk off trade flows.
Safe haven demand continues to boost the USD as the Russia Ukraine war intensifies and Russia shows no signs of slowing its assault on Ukraine. Over the weekend, Russia reiterated that it will continue attacking until their goal is achieved.
PM Boris Johnson has said that the UK is committed to ramping up pressure on Russia. His comments come amid reports that the West could sanction Russian oil, sending oil prices to $120 per barrel and fueling fears of stagflation.
There is no high impacting UK data due until GDP figures at the end of the week, which leaves sentiment in the driving seat.
USD continues to go from strength to strength on safe haven inflows and after strong US NFP report on Friday which saw 678k jobs created, support a more hawkish Fed next week.
The US Dollar index trading above 99.00 for the first time since May 2020. There is no high impacting US data due.
Where next for GBP/USD?
GBP/USD trades sharply lower breaking below several key supports. The pair is now eyeing 1.3140 December 2020 low as the next line in the sand, the 20 sma is crossing below the 100 sma in a bearish signal which could see sellers push below 1.3140 towards, 1.31 round number with a move below here opening the door to 1.3170.
It is worth noting that the RSI is pushing into oversold territory so some consolidation could be on the cards or even a move highers. Buyers would look for a move over 1.32 Friday’s low in order to bring 1.3275 the February low into play, with a move above here negating the near term down trend.
How to trade with City Index
Follow these easy steps to start trading with City Index today:
- Open a City Index account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels
- Place the trade.
Related tags:
Latest market news
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Australian Dollar Outlook: AUD/USD Holds 70c Ahead of RBA and CPI
AUD/USD faces an expected RBA hike and Australian CPI before attention turns to US PCE, ISM and nonfarm payrolls later in the week.
EUR/USD weekly outlook: Oil, inflation and NFP in focus
After coming under significant pressure in recent weeks, the EUR/USD came off its lows to finish the week on a positive note on Friday, albeit with only a mild rebound. That was not enough to prevent the exchange rate falling for the third consecutive week, as the US dollar and bond yields rallied across the board.
USD/JPY Weekly Outlook: Payrolls loom as US rates remain the dominant driver
Strong US growth and hawkish Fed pricing continue to support USD/JPY, while intervention risk appears to be kicking in at lower levels
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.