GBP/USD erases Tuesday’s gains and falls below 1.3200

• GBP/USD’s failure to reclaim 1.3300 exacerbated the downward move below 1.3200.
• Market sentiment is mixed, as European bourses fluctuate while US stocks advance.
• Positive news from the Russia-Ukraine front could aim for a ceasefire between both countries.
• GBP/USD Price Forecast: Downward biased, as the pair aims towards 1.3100.

The GBP/USD pair slides for the second consecutive day on Thursday and drops below the 1.3200 mark amid a risk-on market mood, which usually favored the British pound, but US central bank hawkishness and broad US dollar strength weighed on the pair. At the time of writing, the GBP/USD is trading at 1.3173.

As abovementioned, the market sentiment turned sour of late. European indices closed Thursday session with losses, though US stocks keep in the green. In the FX space, the greenback stays firm around 98.89 per the US Dollar Index, approaching the 99.00 mark, while US Treasury yields rise.

The Russia-Ukraine conflict is back at the forefront of headlines, with reports that NATO’s two-day summit is underway. According to a senior US administration official, US President Biden told NATO that he supported increased NATO troops on the eastern front. However, it is worth noting that there has been some positive news from Eastern Europe. The Ukrainian Chief of Staff, Andriy Yermak, said there was progress in the ceasefire negotiations with Russia and expressed “careful optimism,” as reported by Axio’s correspondent.

Fed’s Kashkari and Evans crossed wires

Early in the North American session, Minnesota Fed President Neil Kashkari expressed that the risk of overdoing it on rate hikes exists. Furthermore, he added that he sees neutral rates at around 2%. Later, Chicago Fed President Chris Evans said that the Fed first rate hike was the “first of many,” while saying that he’s open to 50 bps increased “if needed.”

In the meantime, the UK economic docket featured March Composite PMI for the UK, dipped to 59.7 vs. February’s 59.9 figure, though higher than the 57.8 foreseen.

The US economic docket featured Initial Jobless Claims for the week ending on March 19, which fell the most since 1969. The reading came at 187K lower than the 212K foreseen. Later in the day, the Markit PMIs for March were revealed, which came better than expected.

GBP/USD Price Forecast: Technical outlook

The GBP/USD is tilted downwards, as noted by the daily chart. Tuesday’s rally stalled around November 26 low at 1.3275, though the pair pierced the 1.3300 mark on Wednesday, as the 50-day moving average (DMA) is about to cross under the 100-DMA, each at 1.3402 and 1.3400, respectively.

With that said, the GBP/USD first support would be December 8, 2021, low at 1.3160. Breach of the latter would expose November’s 13, 2020 daily low at 1.3105, followed by the bottom-trendline of a descending channel around the 1.3020-40 region and the 1.3000 mark.