GBP/USD drops to 9-day low as Trump's tax plan gathers momentum
|GBP/USD fell to a 9-day low of 1.3102 after the US Senate's approval of the Republican-backed budget provided much needed momentum to Trump's tax overhaul plan.
The tax reform news has pushed the long duration treasury yields higher. At the time of writing, the 10-year yield is up 2.4 basis points and the 30-yr yield is up 3.2 basis points. The 2-yr yield remains flat lined.
Consequently, the US dollar is well bid across the board. The sell-off in cable could gather pace in Europe/US session if the EU leaders express concerns regarding the lack of progress in Brexit negotiations.
Currently, the GBP/USD pair is trading at 1.3120; down 0.27% on the day. The spread or difference between the US 10-year treasury yield and the 10-year UK gilt yield currently stands at 106 basis points; the highest level since September 7.
GBP/USD Technical Levels
FXStreet Chief Analyst Valeria Bednarik writes, " Renewed selling pressure below 1.3120, October 12th low should result in a 100% retracement to 1.3026. Resistances are now at 1.3180, the immediate Fibonacci resistance, followed by the 1.3220/30 area where moving averages and the next Fibonacci level stand."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.