- The pound faces increasing pressures throughout the market.
- The dollar remains firm supported by rising Treasury yields.
- GBP / USD tests levels below 1.3600.
The Lower risks for GBP / USD are on the rise. The pair is shedding nearly 100 pips on Tuesday and just hit a two-month lows at 1.3593. It is trading around 1.3600, and consolidating below the technical outlook would point to further weakness, with next support at the June low at 1.3570.
The pound is among the worst performing currencies on Tuesday. Gone are the statements “hawkish” of the governor of the Bank of england Bailey, since the current economic situation is clouding the future outlook.
The situation caused by the rise in energy prices in the United Kingdom has changed the context, reflecting the fragility of the panorama and therefore puts pressure on the pound. EUR / GBP rises sharply and is trading at 0.8585. The negative moment for the pound has not yet been left behind and if GBP / USD definitively loses 1.3600 there could be more accelerations to the downside.
For its part, the dollar continues to strengthen from the advance in benchmark interest rates on Treasury bonds. The 10-year tranche reached 1.49%, after having reached 1.50% on Monday for the first time since June. The DXY is rising for the third day in a row and is aiming to test the recent spike.
In the next few hours, the news from United Kingdom they can be important. Added to that will be US house price data, consumer confidence data and the Richmond Fed index. Several Federal Reserve officials will be publicly speaking, including Jerome Powell.
Technical levels
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