During Tuesday’s European trading hours, the GBP/USD currency pair came back to stabilize above the 1.3300 level. This dramatic movement is indicative of the overly sensitive, fearful mood of the markets. Analysts report that small orders are propping up the pair. Traders are still wary of any volatility spurred by wider economic data and global developments.
At the start of the trading day, GBP/USD sat just above the important 1.3300 figure. This positioning makes a small defense of far bids, implying that participants are largely trying to hold the line on offer in a precarious environment. Market participants are closely monitoring external factors that may impact the currency pair’s performance, leading to a prudent approach in trading decisions.
The nervous mood around GBP/USD is a reflection of the overall mood in financial markets. Investors are still sifting through a number of economic indicators and geopolitical developments that may impact the British pound as well as the U.S. dollar. Fear is gripping the market and causing traders to hesitate on taking bold moves. Instead, they are going with the more conservative approach.
This reluctance is especially timely as markets await a spate of important economic data releases that are likely to influence investor sentiment. Analysts are maintaining expectations and arguing that any big surprise away from the consensus number will change the market’s trading dynamics, especially for GBP/USD.