- GBP/USD witnessed some selling for the second successive day amid sustained USD strength.
- The worsening Ukraine crisis weighed on the sentiment and benefitted the safe-haven USD.
- Investors now look forward to the US monthly jobs report (NFP) for some short-term impetus.
The GBP/USD pair dropped to a fresh daily low during the first half of the European session, with bears now awaiting sustained weakness below the 1.3300 round-figure mark.
The pair extended the overnight retracement slide from levels just above the 1.3400 mark and witnessed some selling for the second successive day on Friday. The downfall dragged the GBP/USD pair back closer to the lower end of its weekly trading range and was sponsored by resurgent US dollar demand, bolstered by the global flight to safety.
Investors rushed to take refuge in safe-haven assets in reaction to the news that Russian troops attacked Europe's largest nuclear power plant in Ukraine. This marked a further escalation of the Russia-Ukraine war and pushed the greenback to its highest level since June 2020, which, in turn, exerted some downward pressure on the GBP/USD pair.
The nervousness eased after the International Atomic Energy reported that there has been no change in radiation levels at the Zaporizhzhia nuclear power plant site. Moreover, Ukraine's emergency services said that the fire at the nuclear plant has been extinguished. That said, investors remained on the edge amid the worsening situation in Ukraine.
In the latest development, Ukraine regional authority confirmed that Zaporizhzhia nuclear power plant has been seized by Russian military forces. Moreover, media reports suggest that gas flowing from Russia to Europe has come to a halt. This fueled worries about the potential economic fallout from the Ukraine crisis and acted as a tailwind for the buck.
The fundamental backdrop supports prospects for a further near-term depreciating move for the GBP/USD pair, though the recent range-bound price action warrants caution. Hence, it will be prudent to wait for a convincing break below the weekly low, around the 1.3270 area, before confirming a fresh breakdown and placing aggressive bearish bets.
Market participants now look forward to the US monthly employment details, popularly known as NFP. The closely-watched jobs report is scheduled for release later during the early North American session. Given that the market focus remains on headlines surrounding the Russia-Ukraine saga, the data seems unlikely to provide any meaningful impetus to the GBP/USD pair.
