GBP/USD recovers from 1.3320 amid ease-off in Ukraine nuclear worries

• GBP/USD has returned to 1.3350 after a sharp plunge on Ukraine's nuclear worries.
• The elevated uncertainty has eased off slightly, however, the risk-off impulse is still active.
• Investors await more development over shelling at Ukraine nuclear power stations for further guidance.

The GBP/USD attracted significant offers from the market participants and slipped near 1.3316 amid the Russian attack on Europe’s largest nuclear power station in Ukraine. The headline brought a broad-based selling in the risk-perceived assets as investors considered it further escalation in the Russia-Ukraine war. However, a follow-up buying has been observed and cable is looking to retest 1.3350.

Earlier, the Ukrainian government officials warned the detection of elevated levels of radiation near the plant’s side. Fierce fighting occurred between local forces and Russian rebels, which resulted in casualties, said Mayor of Energodar Dmytro Orlov. Moreover, the shelling of the Zaporizhzhia nuclear power plant was cited as a threat to world security by Orlov.

Later, the International Atomic Energy reported that “Ukraine regulator tells IAEA there has been no change reported in radiation levels at the Zaporizhzhia nuclear power plant site. This has helped the cable to reverse the losses and reclaim some of the lost ground.

Meanwhile, GBP/USD has been balanced in a range of 1.3273-1.3437 since February 24 after a steep fall amid the absence of any potential trigger that could underpin the sterling against the mighty greenback.

The US dollar index (DXY) is looking to reclaim 98.00 amid rising uncertainty over the geopolitical risks. Also, the upbeat US Initial Jobless Claims may strengthen the DXY further.

As of now, the elevated uncertainty has slightly eased off but the risk-off impulse will continue to be the broad-based picture. Going forward, more development on shelling at Ukraine nuclear power stations will keep the investors busy. Apart from that, investors will also focus on US Nonfarm Payrolls, which are due on Friday.