- GBP/USD slides despite BoE rate hikes, and Bailey’s “dovish” comments.
- US Treasury yields soar after positive US jobs report.
- GBP/USD has a neutral bias but a leg down is on the cards as a bearish engulfing candlestick pattern looms.
the pound sterling extended its losses after the Bank of England (BoE) rose 25 basis points, but dovish comments from the BoE’s Bailey at the press conference saw GBP/USD pull back from weekly highs. At the time of writing this article, it is trading at 1.3542.
Meanwhile, a better-than-expected US jobs report sent US Treasury yields higher, led by 2-year and 10-year Treasury yields, rising 12-10 points. basic, standing at 1.318% and 1.92%, respectively. That supports the greenback, which trims some of its earlier losses, rising as much as 0.07% on the day, and clings to 95.44.
GBP/USD Price Forecast: Technical Outlook
During the overnight session on Friday, the GBP/USD pair dipped below 1.3600 on fundamental grounds, dropping more than 100 pips, but the move down was capped by the 100-day moving average (DMA). However, it forms a bearish engulfing candlestick, suggesting an extension of the bearish move on the charts, before consolidating.
The first support level to challenge for GBP/USD will be the confluence of the 100 DMA and the 38.2% Fibonacci retracement around the 1.3507-20 range. A break of the latter could see the pair drop towards the confluence of the 50 DMA and the 50% Fibonacci retracement around 1.3433-55, followed by the 61.8% Fibonacci retracement at 1.3381.
Additional technical levels
Source: Fx Street
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