GBP/USD Price Analysis: Seems vulnerable near multi-week low, just above mid-1.3400s

• GBP/USD dived to over a three-week low on Thursday amid a broad-based USD strength.
• Escalating geopolitical tensions spooked investors and boosted the safe-haven greenback.
• The set-up now seems tilted in favour of bearish and supports prospects for further losses.

The GBP/USD pair added to its intraday losses and dropped to over a three-week low, around the 1.3460 area during the first half of the European session.

Russia's invasion of Ukraine spooked investors and triggered a massive sell-off across the global equity markets, which, in turn, provided a strong boost to the safe-haven US dollar. This was seen as a key factor that exerted heavy downward pressure on the GBP/USD pair and dragged spot prices back below the key 1.3500 psychological mark.

Given the recent failure near a resistance marked by a downward sloping trend-line extending from July 2021 high, the subsequent downfall favours bearish traders. Sustained weakness below the 61.8% Fibonacci retracement level of the 1.3358-1.3644 move up will reaffirm the negative outlook and pave the way for a further depreciating move.

The GBP/USD pair could then accelerate the downward trajectory towards intermediate support near the 1.3435 region en-route the 1.3400 mark. The next relevant support is pegged near the 1.3360-1.3355 area, or 2022 low touched in January, which if broken decisively should pave the way for an extension of the ongoing decline.

On the flip side, attempted recovery moves might now confront resistance near the 1.3500 mark. This is followed by the 1.3515-1.3520 hurdle, above which the GBP/USD pair could climb to the 1.3575-1.3580 area. Some follow-through buying should allow bulls to challenge the aforementioned trend-line, currently around the 1.3635-1.3640 zone.

GBP/USD daily chart

Technical levels to watch