GBP/USD broke below key support in the form of its 50-day moving average and recent lows ahead of the 1.3800 level on Tuesday morning and has since been struggling to reclaim the big figure. As of right now, the pair is consolidating in the 1.3790s, which in fairness is a solid 40 pip recovery from session lows of just above 1.3750. Tuesday’s drop means GBP/USD hit its lowest levels in over a month and the pair currently trades lower by about 0.5% or around 70 pips on the session.
UK news and updates have taken a backseat to a broader pick up in the US dollar than has seen the Dollar Index (DXY) rally back to the north of the 92.00 level and to fresh two-week highs. Markets are in a somewhat defensive mood on Tuesday, with global equities and risk-sensitive commodities, for the most part, lower – Germany announced another extension of lockdown measures including tough restrictions over the Easter holiday period (as expected) and joins the likes of France, Italy and other European countries where Covid-19 cases are rising and lockdown restrictions are tightening.