- Sustained selling around the USD pushes GBP / USD to new multi-year highs on Friday.
- The pair’s bulls largely ignore the disappointing release of UK retail sales data.
- A good rally in US bond yields does little to impress the USD bulls.
The pair GBP / USD has risen to new 34-month highs during the European session on Friday, although it seems to have difficulty capitalizing on the move above the key psychological level of 1.4000.
Following a brief consolidation during the first half of trading action on Friday, the pair has managed to regain some positive traction and has not appeared to be affected by disappointing retail sales data from United Kingdom. A weaker US dollar overall it has been considered a key factor that has provided a modest rally for the GBP / USD pair.
The USD has been hit by disappointing numbers for initial jobless claims from the United States on Thursday, which raised questions about the pace of the US economic recovery. This, coupled with a sudden rebound in equity markets, further hit the safe-haven US dollar against its British counterpart.
Meanwhile, a good rally in US Treasury yields has done little to provide respite for USD bulls. In fact, the 10-year benchmark US bond yield has risen again near one-year highs. amid expectations of passage of the proposed $ 1.9 trillion stimulus package by US President Joe Biden.
On the other hand, the British pound has benefited from the impressive rate of vaccination against COVID-19 in the UK, which should allow the UK government to lift restrictions and get the economy moving. That said, the mild overbought conditions have limited any further gains for the GBP / USD pair, at least for now.
Market participants are now awaiting the US economic calendar, highlighting the release of preliminary PMI figures (manufacturing and services) and existing home sales data. Apart from this, the US bond yields can influence the USD price dynamics and generate some opportunities around the GBP / USD pair.
GBP / USD technical levels
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