GBP/USD dives to one-week lows, below 1.3000 mark amid notable USD demand

The GBP/USD pair witnessed some heavy selling during the early European session and slipped below the key 1.3000 psychological mark, refreshing weekly lows in the last hour.

The pair continued with its struggle to gain any meaningful traction and was being capped by a combination of factors. The impasse on the matter of the future access of EU fishing fleets to UK waters has dampened prospects for an immediate breakthrough in Brexit talks. This, in turn, took its toll on the British pound.

On the other hand, the US dollar drove some aggressive haven flows amid growing market worries about an alarming pace of growth in news coronavirus cases in the US and Europe. Investors seem worried that renewed lockdown measures to curb the second wave of COVID-19 infections could prove detrimental for the already fragile global economy.

Apart from this, the disappointment over the next round of the US fiscal stimulus measures and the US political uncertainty dented the global risk sentiment. This was evident from a steep decline in the US equity futures, which forced investors to take refuge in traditional safe-haven assets and provided an additional boost to the greenback.

With the latest leg down, the GBP/USD pair now seems to have found acceptance below 200-hour SMA and seems vulnerable to slide further. Hence, some follow-through weakness towards intermediate support near the 1.2945 horizontal level, en-route the 1.2900 mark, looks a distinct possibility amid absent relevant market moving economic releases.

Technical levels to watch