- GBP / USD advances for the third day in a row, breaking above 1.3600.
- Dismal market sentiment stimulated safe haven flows.
- GBP / USD: Bullish above 1.3600; below, it will be bearish.
The GBP/USD It is climbing for the third day in a row, cutting back on some of last week’s losses, trading at 1.3613, down almost 0.5%, at the time of writing.
Market sentiment is pessimistic and risk flows to safe-haven assets pushed the Swiss franc out, outpacing the US dollar. Evergrande’s concerns are taking a toll on investor sentiment. In addition, inflationary pressures, the energy crisis and concerns about the US debt ceiling keep traders cautious.
The US dollar index, which tracks the dollar’s performance over six of its rivals, is down 0.30% to 93.79, while the yield on 10-year US Treasuries rose by as much as two basis points (bps), currently at 1,484%, down from 1.50% for the second day in a row.
On the UK economic agenda, no macroeconomic news was presented. On the other hand, the US Census Bureau released August Factory Orders, which increased 1.2%, better than the 0.9% predicted by economists. The report failed to boost the US dollar as traders await the US Non-Farm Payroll report released on Friday.
GBP / USD Price Forecast: Technical Outlook (Daily Chart)
The British pound’s push above 1.3600 could open the door to further gains, but a daily close above the latter is required. In case of that result, the first resistance level would be the September 24 low at 1.3657. A break out of that level could push the pair towards key supply levels like 1.3700 and the 50-day moving average at 1.3762.
On the other hand, failure at 1.3600 would put additional downward pressure on GBP / USD. The first demand zone would be the July 20 low at 1.3571. A break out of that level would expose 1.3500, followed by the first October low at 1.3433.
The Relative Strength Index is at 45, sloping up, although it is still bearish as it is still below the 50 midline.
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