GBP/USD prints fresh two-week highs above 1.3870 as the US dollar remains weak
- Pound prints fresh highs across the board during the American session.
- US dollar consolidates post NFP losses, even as US yields rise sharply.
- GBP/USD up for the third day in a row, gains a hundred pips from a week ago.
The GBP/USD printed a fresh two-week high during the American session at 1.3874. it remains near the top, holding onto most of its daily and weekly gains, on the back of a weaker US dollar across the board.
The US employment numbers triggered a decline of the greenback, adding to weekly losses. The numbers showed hiring slowed in August to 235K, below the 750K expected; the unemployment rate dropped to 5.2% and wages rose 0.6%. “Wages continue to push higher as a result, but the dampened pace of hiring and bevy of workers still on the sidelines will keep the Fed awaiting more progress on the labor market. Today's report fully closed the door on the chance of a September taper announcement, in our view”, explains analysts at Wells Fargo.
The decline of the dollar took place even as US yields head higher. The US 10-year rose from 1.27% to 1.33%. In Wall Street, main stock indices are mixed for the day and the week. The DXY is off lows at 92.07, down 0.15%, on its way to the fourth decline in a row.
Technical outlook
“The "Death Cross" pattern triggered the 50-day Simple Moving Average (SMA) crossed below the 200-day SMA, implying further losses. Downside momentum adds to the gloomy picture. On the other hand, the currency pair has crossed above these two SMAs and seems stable”, says Yohay Elam, Senior Analyst at FXStreet.
He warns that cable has been trading within the wide 1.3570-1.40 range in the past two months, and every move to the edges has resulted in mean-reversion. According to him, support awaits at 1.3785, followed by 1.3670, while on the upside, resistance stands at 1.3895, followed by 1.4000.
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.
