GBP/USD consolidates near 1.3920 amid renewed USD strength

GBP/USD stalls after the previous day’s sharp rise.
Uptick in US treasury yields lifts demand for the US dollar.
GBP remains under pressure amid Brexit chaos and delayed economic reopening.

Rekha Chauhan Independent Analyst

The appreciative move in the US dollar keeps GBP/USD gains under check. The pair accumulated stellar gains on Monday after the heavy losses incurred in the previous weeks. However, it lacks the strength to hold onto the gains.

At the time of writing, GBP/USD trades at 1.3916, down 0.10% for the day.

The US Dollar Index (DXY), which tracks the performance of the greenback against its six major rivals, is little changed at 91.93 with 0.03% gains. The DXY declined 0.52% in the previous session after retracing from two months high.

The US 10-year benchmark yields stood at 1.49% with 0.59% gains as investors continued to digest the impact of the Fed’s hawkish tone in the last week and as pressure mounted due to reflation trades.

In the meantime, Fed Chair Jerome Powell in his remark prepared ahead of a House hearing today stated that the central bank will continue to support the economy.

In addition to that, St. Louis Fed President James Bullard commented that the first increase could come as soon as next year. New York Fed President John Williams said economic data and conditions have not progressed much to shift FOMC’s monetary policy stance. The dollar gained on the volatility following mixed comments from Fed officials.

On the other hand, the British pound remains pressurized due to the delay in ending all COVID-19 restrictions on June 21. The decision could impact sterling's valuation negatively for the time being.

Meanwhile, UK Prime Minister Boris Johnson said at a news conference that he is now looking to July 19 as the next date to uplift all the restrictions.

In addition, the Brexit saga continues to weigh on the performance of the cable as there was no breakthrough on the deadlock following the G7 summit. UK Brexit Minister David Frost is due to meet his EU counterpart Maros Sefcovic this week.

Market participants look forward to the US Existing Home Sales data, Richmond Fed Manufacturing Index, and Fed Chair Powell Testimony to gain some fresh trading impetus.

GBP/USD additional levels

GBP/USD

Overview
Today last price	1.3921
Today Daily Change	-0.0013
Today Daily Change %	-0.09
Today daily open	1.3934

Trends
Daily SMA20	1.4103
Daily SMA50	1.4025
Daily SMA100	1.394
Daily SMA200	1.3603

Levels
Previous Daily High	1.3937
Previous Daily Low	1.3787
Previous Weekly High	1.4133
Previous Weekly Low	1.3792
Previous Monthly High	1.4234
Previous Monthly Low	1.3801
Daily Fibonacci 38.2%	1.388
Daily Fibonacci 61.8%	1.3844
Daily Pivot Point S1	1.3835
Daily Pivot Point S2	1.3735
Daily Pivot Point S3	1.3684
Daily Pivot Point R1	1.3985
Daily Pivot Point R2	1.4036
Daily Pivot Point R3	1.4135

Author

Rekha Chauhan

Independent Analyst

Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.

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