GBP/USD drops to fresh 2022 low, further below mid-1.3200s on upbeat NFP report

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  • GBP/USD witnessed heavy selling for the second successive day amid a blowout USD rally.
  • The worsening situation in Ukraine, upbeat NFP report continued underpinning the USD.
  • Technical selling below the 1.3270 area aggravated the bearish pressure around the pair.

The GBP/USD pair continued lowing ground through the early North American session and weakened further below mid-1.3200s in reaction to upbeat US monthly jobs report. The pair was last seen trading around the 1.3240-1.3235 region, down nearly 0.80% for the day.

The pair added to the overnight losses and continued losing ground for the second successive day on Friday amid a blowout US dollar rally, bolstered by the global flight to safety. The Russian attack on Ukraine’s Zaporizhzhia nuclear power plant – the largest of its kind in Europe – raised fears of an environmental catastrophe. This, in turn, unnerved investors and boosted demand for traditional safe-haven assets.

The stronger USD momentum got an additional boost from better-than-expected US employment details. In fact, the headline NFP showed that the US economy added 678K new jobs in February, smashing market expectations for 400K. Adding to this, the previous month’s reading was revised higher to 481K from 467K reported earlier. Moreover, the unemployment rate fell more than anticipated, to 3.8% from 4.0% in January.

The greenback shot to its highest level since May 2020 and was seen as a key factor that dragged the GBP/USD pair lower. Apart from this, the ongoing downward trajectory could further be attributed to some technical selling below the 1.3270 support zone. This now seems to have set the stage for a further near-term depreciating move amid the worsening situation in Ukraine.

Technical levels to watch

 

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