- The dollar gains moment before the American session.
- The pound marks daily lows against the euro.
- GBP/USD rebound fails to pick up pace.
The GBP/USD erased most of the intraday gains and pulled back falling below 1.2260. Earlier the pair had climbed to 1.2325, the highest level in two days. A combination of dollar paring losses across the market and some pound weakness favored a more than 50 pip retracement from highs.
The dollar gained momentum on a rise in Treasury bond yields. The 10-year tranche is at 3.28% and the 30-year tranche is at 3.35%, testing the day’s highs. The pound, for its part, lost strength in the run-up to the American session. EUR/GBP is trading back above 0.8600 at daily highs.
In the US, the report on the sale of existing homes will be published and officials from the Federal Reserve (Barkin and Mester) will speak.
The UK is undergoing the biggest walkout of rail workers in decades, after unions reject the companies’ latest offer.
In regards to Bank of England The comments of the chief economist, Huw Pill, who affirmed that the central bank is prepared to sacrifice growth to bring down inflation, were highlighted. A rise of 50 basis points is expected for the August meeting. About data from United Kingdomit was known that the inflation expectations of the manufacturing sector have fallen in June.
GBP/USD enters the American session with doubts about the persistence of the rebound from the low in years reached last week below 1.2000. The pair needs to firm up above 1.2300 to enable further rallies. The next strong resistance is at 1.2380. In the opposite direction, consolidating below 1.2250 would lose momentum, favoring a bearish extension. Strong support then appears at the 1.2175 area.
Technical levels
Source: Fx Street
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