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Sterling Manages To Hold Fort at 1.35 Handle As Profit Booking Caps USD Gains

Colin First

The GBPUSD pair is currently trading at 1.35140 up 0.05% from yesterday’s closing price. The GBP/USD continues to trade within its established range, and yesterday’s drive lower failed to break out of the familiar boundaries from last week. The pair is still trading near 1.3500 ahead of today’s London market session. The Sterling took a nose dive downtrend reaching as low as 1.3450, the lowest for this year so far post increase in unemployment claims. UK wages data was in line with expectations at 2.9%, Sterling woes rose further due to increase in demand for USD.

GBPUSD Continues to be Defiant

US dollar performed well against all major global counterparts as Treasury Yields reached multi year highs. The 10-year Treasury yield benchmark reached its highest level since 2011 at 3.095% while the 2-year note yield rose to 2.591% which has not been seen since 2008. As mentioned in previous article Investors are dumping bonds and stocks to buy USD which is expected to grow further this year owing to possibility of multiple rate hikes this year.  However the pair managed to regain its footing at 1.35 handle as market participants started to take profits on their shorts. Mixed US macro data had little impact as USD’s momentum yesterday was greatly influenced by bond yields.

GBPUSD Hourly

Economic Calendar remains light For UK during today and tomorrow’s trading session with a highly active Calendar in US market. Dollar continues to grow strong with increase in volatility in favor of USD in short term. Technically, the GBP/USD is on the downside with the Momentum, the Relative Strength Index and Slow Stochastics all pointing downward on 1-hour chart. The GBP/USD is likely to face some range bound momentum in 1.3500-1.3460 price range while a break below this range is likely to push GBP into 1.33 handle as trading session moves further this week. Expected support and resistance are at 1.3460 / 1.3410 / 1.3341 and 1.3618 / 1.3673 / 1.3728 respectively.

This article was originally posted on FX Empire

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