GBP/USD hammered into 1.35 with a light schedule on tap for Wednesday

Sterling trapped in a rut as sellers struggle to continue sending the GBP/USD south.
Rangebound pair sees little GBP events for the London markets.

Joshua Gibson FXStreet

The GBP/USD continues to trade within its established range, and yesterday's drive lower failed to break out of the familiar boundaries from last week. The pair is still trading near 1.3500 ahead of Wednesday's London market session.

The Sterling is struggling to find a leg up in the markets as unemployment claims rose sharply in the UK, and US Treasury yields are climbing to multi-year highs amidst a selloff in US bonds, and the yield spike is bolstering the Greenback across the board.

Today sees a notable lack of figures for the GBP, but the US session is a heavily-scheduled affair, starting off with US Building Permits (forecast 1.35 million, prev. 1.354 million) alongside a speech from the Fed's Bostic at 12:30 GMT, followed by monthly Industrial Production figures for April at 13:15 GMT, forecast at 0.6%, a minor uptick from the previous reading of 0.5%. Capping off the US session will be a speech from the Fed's Bullard at 22:30 GMT.

GBP/USD levels to watch

Despite the rising yields and slumping UK economic figures, the GBP is admirably holding onto the 1.3500 handle, and as FXStreet's own Valeria Bednarik noted, "despite the lower low for the year, the GBP/USD pair managed to bounce back to settle around the 1.3500 level, still within familiar levels. Technically, and considering resurgent dollar's demand, the risk is leaned to the downside, given that in the 4 hours chart, the pair is developing below a still horizontal 20 SMA, while technical indicators are posting modest bounces within bearish territory. Speculative interest is at this point not sure whether to push the greenback higher or not but keeps it near recent highs, somehow favoring a dollar continuation rally on the back of interest rates´ differentials."

Support levels: 1.3550 1.3500 1.3460

Resistance levels: 1.3610 1.3660 1.3700

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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