GBP/USD falls to fresh two-year lows near 1.1740 as dollar strengthens
- DXY up by 0.82%, near multi-year highs.
- US yields rise further, 10-year back above 3.0%-
- GBP/USD drops for the fourth consecutive day, below July lows.
The GBP/USD dropped further and printed a fresh two-year low at 1.1736. It is undress pressure amid a stronger US dollar and risk aversion.
Yields up, stocks sharply lower
Equity prices in Wall Street are falling sharply. The Dow Jones is at 12 day lows, falling by 1.44% and the Nasdaq tumbles more than 2%. The FTSE 100 lost 0.22%.
Despite risk aversion, Treasury bonds are adding to last week's losses. The US 10-year stands at 3.02%, the highest since July 21 and the 30-year is at 3.25%, the highest since July 8. The US Dollar Index is testing 109.00, up 0.82%, on its way to the highest daily close since September 2002.
Expectations about more aggressive tightening from the Federal Reserve keeps the dollar on demand ahead of the Jackson Hole symposium. On Friday, Jerome Powell will deliver a speech. A 50 basis point rate hike is fully priced, although a 75 bps hike is also likely according to money markets.
Below 1.1740, the next support could be seen around 1.1710 and then not much until 1.1630. The 2020 low waits near 1.1400 but before a strong area is located at 1.1450. On the upside, 1.1795 has become the immediate resistance, followed by 1.1835 (Aug 22 high).
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
