GBP / USD Extends Pullback Toward 1.3600 As Pound Loses Momentum


Get real time updates directly on you device, subscribe now.

  • The pound sterling falls across the board during the Amriecana session.
  • The US dollar maintains modest gains even as the US yield falls.

The pair GBP/USD extends the pullback from the 1.3700 region and has reached a new intraday low near 1.3610 during the American session on Wednesday. The pair is returning some of Tuesday’s gains after failing to break above the 1.3700 level and in the midst of a recovery in the US dollar.

The dollar regained strength, with the DXY index climbing back to the daily high near 90.30. Gains have been modest as Wall Street markets have moved in a mixed fashion and despite falling US yields. The 10-year yield has fallen to 1.09%, the lowest level since Jan.8.

Economic data from the United States has shown that the annual CPI stood at 1.4% in December, slightly above the 1.3% expected. The focus is now on the Fed’s Beige Book. Investors are also keeping an eye on US policy.

The pound was among the best performing currencies, still buoyed by comments yesterday from Bank of England Governor Andrew Bailey, who warned of negative interest rates. On Wednesday, UK vaccine news also offered support for the pound which reached monthly highs against the euro before falling back. The latest UK COVID numbers showed an increase in cases (47,000 vs. 45,000) that remain far from recent highs. On the negative front, deaths (1,564) reached a record high.

Short term outlook for GBP / USD

From a technical perspective, GBP / USD is correcting lower after again hitting a strong barrier at 1.3700. The pair must break above this level to clear the way for further gains. On the downside, a break below 1.3620 would expose 1.3600. The negative tone is likely to persist as long as GBP / USD is below 1.3660.


Get real time updates directly on you device, subscribe now.

Leave A Reply

Your email address will not be published.