- GBP/USD meets fresh supply as US dollar recovers further ground.
- European vaccine row and Wall Street meme frenzy spook investors.
- Focus shifts to the US macro news and sentiment around US stocks.
The buying interest around the US dollar remains unabated amid broad risk-aversion, knocking-off GBP/USD further towards the 1.3650 level.
The sell-off in the major gathers pace in the European session, as the equities shed nearly 1% due to concerns over the speculative trading seen on Wall Street stocks over the past few days.
Also, the risk sentiment remains sour amid the covid vaccine row between the UK and European Union (EU). The production delays in the vaccines have triggered a dispute between the UK, EU and drugmaker over sufficient supply of the jabs in the Old Continent.
Further, American pharma giant Novavax Inc. said that its vaccine is only 49% efficient against the new South African covid strain, which exacerbated the pain in the market.
Alongside riskier assets such as the equities, the pound got hit while the safe-haven US dollar extended its recovery after Thursday’s downslide. The US dollar index gains 0.30% on a daily basis to trade around 90.75, as of writing.
Markets now look forward to the US Core PCE Price Index and revised UoM Consumer Sentiment data for fresh trading incentives. Meanwhile, covid and vaccine updates will also grab attention amid month-end flows and the sentiment on Wall Street.
GBP/USD: Technical levels
“The 4-hour chart shows the bulls have faced rejection in the 1.3750 neighborhood multiple times since Jan. 21. That, alongside lower highs on the 4-hour chart Relative Strength Index, indicates scope for a pullback. The immediate support is seen at 1.37, which, if breached, would open the doors to 1.3610 (Jan. 26 low),” FXStreet’s Analyst Omkar Godbole noted.
GBP/USD: Additional levels
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