- The dollar extends its gains during the American session on Friday.
- Economic data continues to support further rate hikes from the Fed.
- GBP/USD tests levels below the critical support zone of 1.1940.
The pair GBP/USD it continued to fall on Friday after the release of US economic data and bottomed at 1.1927, the lowest level in a week, and slightly above the monthly low.
The pound consolidates weekly losses in a context of strong dollar and rising US yields. US activity and inflation figures, above consensus, favored expectations of rate hikes longer term interest. As a consequence, the 2-year Treasury yield jumped to its highest level since November, 4.79%, and the 10-year yield approached 4%.
On Friday, the dollar accelerated higher, also driven by deteriorating market sentiment. GBP/USD broke decisively below 1.2000. It is hovering around 1.1940/50, almost a hundred points below the level it was a week ago.
The weekly chart shows price testing the 20-week SMA after failing to rally above the 20-day SMA at 1.2120. It falls for the third day in a row.
“If the pair closes below the critical support at 1.1940, where the 100 and 200 DMAs converge, a sharp sell-off towards the 1.1900 zone will ensue. Further south, the 2023 low at 1.1841 will be the next target.” sellers,” writes Dhawni Mehta, an analyst at FXStreet. According to Mehta, GBP/USD needs acceptance above the 1.2150 static resistance and 50-day DMA to start a new rally towards 1.2200.
technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
