As a result, the GBP/USD currency pair fell sharply after hitting an intraday high close to 1.3400. As the American trading session unfolded, the pair dipped below the important support level of 1.3350. This movement is important and represents a big change in market sentiment.
In early trading, GBP/USD was strong, moving higher towards 1.3400. However, this upward momentum proved short-lived. Market participants were focused on the economic data and the turn in sentiment. Consequently, the duo closed below its daily highs, with this move hinting at a possible trend reversal.
As the American session played out, GBP/USD stayed under significant downward pressure, finally trading below the 1.3350 level. This drop-off points to the fact that investors have begun responding to macroeconomic signals and geopolitical events driving the currency market.
The current GBP/USD trading value of just under 1.3350 is well below that mark. This is a big departure from how it performed in the past. Some analysts see this move as a sign of worries about the British economy as a whole, and especially about its long-term recovery from the pandemic.
That’s why market participants are hanging on every economic shake and shudder. They understand that changes in GBP/USD currency pair are usually reactive to shifts in U.S. monetary policy, inflation printouts, and macroeconomic data releases. Retreat below 1.3350 would likely open the way for more choppy trade in coming sessions.