Near-term support seems to have formed at 1.3340

GBP/USD has turned south following Friday’s modest rebound. The pair is likely to face additional bearish pressure in case sellers drag it below 1.3340, FXStreet’s Eren Sengezer reports.

Pound recovery unlikely in current risk-averse environment

“As things currently stand, a diplomatic solution to the Russia-Ukraine war seems unlikely, suggesting that the dollar is likely to continue to be preferred over the British pound, at least in the near term.”

“GBP/USD seems to have met interim support at 1.3340. If that level turns into resistance, the pair could decline toward 1.3300 (psychological level) and 1.3280 (static level, multi-month low) afterwards.”

“On the flip side, 1.3400 (psychological level) aligns as initial resistance before 1.3430 (static level, 20-period SMA on the four-hour chart). A daily close above the latter is likely to attract buyers and open the door for an extended rebound toward 1.3500.”