GBP/USD falls to a low of 1.2750, nears the low for the year at 1.2726
The post-BOE bounce towards 1.2970 proved to be short-lived with the WHO coming out to call the coronavirus a pandemic not really helping with the situation yesterday.
Cable fell back towards 1.2820 towards the closing stages yesterday and is slipping lower today with the dollar not feeling a heavy squeeze despite Treasury yields falling today.
Notably, cable is now down to 1.2750 and is closing in on another test of the 50.0 retracement level @ 1.2736 as well as the 200-day MA (blue line) @ 1.2711. Those will be the key support levels to watch out for in the sessions ahead.
A break below the latter in particular would be a key technical victory for sellers as it will shift the bias in the pair to being more bearish.
From a fundamental spot, it is a bit tricky for cable with the dollar a bit all over the place over the past two weeks. On the one hand, the greenback suffers from a sharp fall in Treasury yields but then again, yields are well off the record low posted on Monday.
Meanwhile, EUR/GBP is also seeing a squeeze higher above 0.8800 and that could lead to further weakness in the pound should the pair keep a move towards 0.9000.
There are reasons to be optimistic in the pound amid the coordinated stimulus measures yesterday but those are likely to only be seen in the medium-term. For now, the technical picture isn't looking pretty but there are key support levels for buyers to lean on.
Let's see if they can put up a solid defense or if sellers will start to overwhelm as the dollar starts to return to favour potentially.
