GBP/USD pressured to key support despite a crucial drop in US yields

  • GBP/USD is now pressured by bears at critical support.
  • DXY also meets a key support level on the daily chart. 

At the time of writing, GBP/USD is trading at 1.3736 between a range of 1.3718 and 1.3782 and around flat on the day. 

It is really more of a US dollar story than anything else on Thursday, with the markets soaking up the Federal Reserve's commitment for lower for longer rates

In yesterday's Federal Open Market Committee minutes, various participants noted that changes in the path of policy should be based primarily on observed outcomes rather than forecasts. 

This has given rise to a topping in US yields with the benchmark 10-year Treasury yield down by some 2.5% at the time of writing, off its lows of the day of 1.6280%.

Meanwhile, the US dollar traded near its lowest in more than two weeks versus major peers, tracking Treasury yields lower. 

The dollar index DXY which measures the US currency against a basket of six currencies extended its losses to a low of 91.999 after dipping as low as 92.134 on Wednesday for the first time since March 23.

Technical analysis, GBP/USD & DXY

Technically, the DXY is now at critical support which has enabled cable to stabilize a bit on broad dollar weakness.  

''Still, the break below $1.3765 sets up a test of the March 25 low near $1.3670,'' analysts at Brown Brothers Harriman argued.

''While cable remains hostage to broad movements in the dollar, it traded today at a new low for this move near $1.3720 and is on track to test the March low near $1.3670 and then the February low near $1.3565.''

GBP/USD daily chart

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD slumps to fresh 19-month low as dollar rally continues

EUR/USD dropped below 1.1200 and touched its lowest level since June 2020 near 1.1180 during the European trading hours on Thursday. The unabated dollar strength, as reflected by the 0.5% rise in the US Dollar Index, continues to weigh heavily on the pair ahead of high-tier data releases from the US.


GBP/USD tests 1.3400 as greenback continues to gather strength

GBP/USD is trading at its weakest level in a month and testing 1.3400 support ahead of the American session. The US Dollar Index extended its Fed-fueled rally and climbed to its highest level since July 2020 near 97.00. Eyes on US GDP and Durable Goods Orders data.


Gold loses recovery momentum, falls below $1,810

Gold recovered to $1,820 area following Wednesday's sharp drop but failed to preserve its bullish momentum on Thursday. XAU/USD is now trading deep in the negative territory below $1,810 as investors await Q4 growth data from the US.

Gold News

Why Bitcoin price could form a bottom following the January 28 options expiry

Bitcoin open interest volume by expiry date indicates a majority of bearish sentiment in the market. BTC options worth roughly $2 billion will expire by the end of this week. 

Read more

Tesla share price hits speed bump

The Tesla share price has been under pressure for most of this month, having fallen below its $1trn in market cap it has struggled to rally from the three month lows we saw earlier this week.

Read more