The GBP/USD pair retreated over 50 pips from the daily high and dropped back below the 1.3400 round-figure mark during the early part of the European session.

The pair attracted some buying on the last day of the week and built on the overnight solid rebound of around 100 pips from the two-month low, around the 1.3270 region. The intraday move up, however, ran out of steam ahead of mid-1.3400s amid the emergence of some US dollar dip-buying, bolstered by reports that Russian forces have entered the Obolon district in Kyiv.

On the bigger picture, despite cable's brief break of 2016 post-Brexit low of 1.1491 to a near 35-year trough of 1.1412 in mid-Mar 2020 on safe-haven USD's demand following free fall in global stocks, price rallied to 1.3686 on the last trading day of 2020 following a last-minute EU-UK trade deal, then to a near 34-month, 1.4241 peak in late Feb suggests a major low is made. Despite hitting a 3-year peak of 1.4250 on Jun 01, a selloff to as low as 1.3162 in Dec signals long-awaited correction has occurred. Having said that, cable's impressive rally to 1.3749 in early Jan confirms temp. low made, despite subsequent sharp retreat to 1.3359, gain to 1.3643 in mid-Feb may head back to 1.3661, 1.3749.

Today, cable's break of Jan's 1.3359 low to 1.3273 confirms early correction FM Dec 2021 trough at 1.3174 has ended n subsequent strong bounce may bring 1-2 days of choppy swings b4 prospect of further weakness to 1.3240 next week. Only a daily close abv 1.3487 aborts bearishness n risks 1.3536/39 Mon.

GBPUSD Expected To Continue Its Hawkish Rally From 1.3300

Feb 25 2022