GBP/USD retreats further toward 1.3600 as pound loses momentum


  • Pound drops during the American session across the board.
  • US dollar holds onto modest gains even as US yield decline.

The GBP/USD pair retreated further from the 1.3700 area and printed a fresh daily low during the American session at 1.3620. Cable is trimming some of Tuesday’s gains after being unable to make a run above 1.3700 and amid a US dollar recovery.

The greenback recovered strength and the DXY rose back to the area of the daily high near 90.30. The gains were modest as Wall Street trades mixed and despite the decline in US yields. The 10-year yield fell to 1.09%, the lowest since January 8.

Economic data from the US showed annual CPI stood at 1.4% in December, slightly above the 1.3% expected. Attention now turns to the Fed’s Beige Book. Traders also keep an eye on US politics.

The pound was among the top performers still boosted by yesterday’s comments from Bank of England governor Andrew Bailey who was cautions about negative interest rates. On Wednesday, reports about vaccines in the UK also offered support to the pound that printed monthly highs versus the euro before pulling back. The latest COVID numbers in the UK showed an increase in cases (47K vs 45K) that remain far from the recent highs; on the negative front deaths (1,564) hit a record.

Short-term outlook

From a technical perspective, the GBP/USD is correcting lower after hitting again a strong barrier at the 1.3700. The pound needs to break in order to clear the way to more gains. On the downside, a break under 1.3620 would expose 1.3600. The negative tone is likely to persist while under 1.3660.

Technical levels

GBP/USD

Overview
Today last price 1.3628
Today Daily Change -0.0038
Today Daily Change % -0.28
Today daily open 1.3666
 
Trends
Daily SMA20 1.3549
Daily SMA50 1.3393
Daily SMA100 1.3193
Daily SMA200 1.2896
 
Levels
Previous Daily High 1.3669
Previous Daily Low 1.3502
Previous Weekly High 1.3704
Previous Weekly Low 1.3532
Previous Monthly High 1.3686
Previous Monthly Low 1.3134
Daily Fibonacci 38.2% 1.3605
Daily Fibonacci 61.8% 1.3565
Daily Pivot Point S1 1.3555
Daily Pivot Point S2 1.3445
Daily Pivot Point S3 1.3388
Daily Pivot Point R1 1.3722
Daily Pivot Point R2 1.3779
Daily Pivot Point R3 1.3889

 

 

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