GBP/USD fails to break the 1.3600 figure as sellers emerge, pushing the pair towards 1.3570s
|- The British pound barely losses some 0.12% as the New York session ends.
- A risk-off market mood and higher US T-bond yields boosted the greenback, weighed on the pound.
- GBP/USD is neutral, though a break above 1.3600 would expose a challenge of the 200-DMA.
On Monday, US central bank’s rising rates expectations and omicron woes dampened the market sentiment, boosting the safe-haven peers like the greenback and the Japanese yen, the strongest currencies of the G8. That said, the British pound retreats from daily highs and turns into negative territory, down some 0.12% in the North American session, trading at 1.3579 at the time of writing.
Higher US Treasury yields boost the buck
In the meantime, the US 10-year Treasury yield advance one basis point sits at 1.778%, a tailwind for the US Dollar Index, which tracks the greenback’s performance against a basket of its rivals, advances some 0.26%, currently at 95.97, weighing on the GBP/USD pair.
During the New York session, a report from Goldman Sachs (GS), revealed that the bank estimates four rate hikes in 2022. The same report noted that the Fed could begin to reduce its balance sheet by mid-2022.
In the same tone, JP Morgan brought forward the first hike to the Federal Funds Rate (FFR), from June to March.
GBP/USD traders attention turns to US inflation figures and the testimony of Federal Reserve policymakers Jerome Powell and Lael Brainard against the US Senate Banking Committee.
GBP/USD Price Forecast: Technical outlook
The GBP/USD pair has a neutral bias, though it has been seesawing around the 100-day moving average (DMA) at 1.3554 for the last five days. Worth noting that GBP bulls showed around the abovementioned and broke a nine-month-old downslope trendline on January 7, exposing the 1.3600 figure.
The GBP/USD’s faced strong resistance at 1.3600. A breach of the latter would expose November 4 daily high at 1.3698, followed by the 200-DMA at 1.3737.
On the flip side, a break below the 100-DMA would expose the trendline mentioned above around the 1.3525-50 region, which once cleared would reveal the 1.3500 figure, followed by the January 3 daily low at 1.3431.
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