- Range trades on Tuesday in the major pairs.
- The dollar loses strength due to the recovery of Treasury bonds.
- GBP/USD finds support at the 1.1000 zone.
The GBP/USD is rising on Tuesday cutting off four straight days of lows, supported by some dollar weakness. The pair bottomed out at 1.0995, the lowest since September 29, but quickly returned above 1.1000 and started a recovery to 1.1112, the highest in two days.
The rises were trailed by the combination of a rebound in equity markets and sovereign bonds. wall street is trading in the red, but with a modest drop. Treasury bond yields have moved away from daily highs. The 10-year rate is at 3.91% after having been above 4.00% hours ago. The environment took strength from the dollar.
Regarding data, in the US the focus is on Wednesday’s wholesale inflation data and the Federal Reserve minutes. On Thursday the data for the week will arrive with the inflation figures for September.
In the UK, labor market data was released showing a higher-than-expected rise in earnings and a drop in the unemployment rate to 3.5%, the lowest level since 1974.
The Bank of England announced that it intervened for the second time in the bond market and that it will expand purchases. The monetary authority reiterated that a liquidation of gilts presents a risk to financial stability.
Support at 1.1000
GBP/USD pullback found support for now at the 1.1000 zone. A consolidation below would enable further downside with next strong support at 1.0905/15. To the upside, around 1.1105/10 there is resistance to watch out for and above that the next major one can be seen at 1.1220.
Technical levels
Source: Fx Street
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