- The pound sterling just lost 0.12% at the end of the American session.
- Risk aversion and rising US Treasury yields boosted the USD, hurting the pound.
- GBP / USD is neutral, although a break above 1.3600 would expose a challenge from the 200 DMA.
On Monday, expectations of rising US central bank rates and Omicron woes weighed on market sentiment, boosting safe-haven currencies like the dollar and Japanese yen, the strongest currencies in the G8. . That said, the British pound is back from daily highs and plunged into negative territory, down 0.12% in the US session, trading at 1.3579 at the time of writing.
Rising U.S. Treasury Yields Boost the Dollar
Meanwhile, the 10-year US Treasury yield advanced 1bps 1.778%, a tailwind for the US dollar index, which tracks the performance of the dollar against a basket of its rivals, up 0.26%, currently at 95.97, weighing on the GBP / USD.
During the American session, a report by Goldman Sachs (GS) revealed that the bank estimates four rate hikes in 2022. The same report noted that the Fed could begin to reduce its balance sheet in mid-2022.
In the same vein, JP Morgan advanced the first increase in the Federal Funds Rate (FFR), from June to March.
GBP / USD traders’ attention is focused on the US inflation figures and the testimony of Federal Reserve lawmakers Jerome Powell and Lael Brainard against the US Senate Banking Committee.
GBP / USD Price Forecast: Technical Outlook
The GBP / USD pair has a neutral bias, although it has hovered around the 100-day moving average (DMA) at 1.3554 for the past five days. It is worth noting that GBP bulls showed around the aforementioned and broke a nine-month downtrend line on Jan 7, exposing the 1.3600 level.
GBP / USD faced stiff resistance at 1.3600. A breakout of the latter would expose the November 4 daily high at 1.3698, followed by the 200 WFD at 1.3737.
On the other hand, a break below the 100 DMA would expose the aforementioned trend line around the 1.3525-50 region, and a break below 1.3500 would expose the January 3 daily low at 1.3431.
Technical levels
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