GBP/USD trims losses and climbs to the 1.3850 area
- US Dollar lost momentum during the American session, DXY pullback to 92.00.
- GBP/USD negative for the day, off lows.
The GBP/USD pair bottomed at 1.3813 and then rebounded, trimming losses. It is trading near the 1.3850 area, still in negative ground for the day but off lows. The recovery of the cable was favored by a pull back of the dollar across the board.
Despite better-than-expected US economic data, the dollar lost strength. The unstable move higher in US yields contributed to the rebound in GBP/USD. The US 10-year yield spiked to 1.51% and then quickly retreat back to 1.48%. The DXY hit weekly highs at 92.20 and now is struggling to hold above 92.00.
GBP/USD outlook
The GBP/USD managed to remain above 1.3800, however it is still under pressure. The area around 1.3800 is a very strong support that if it is firmly broken it could lead to an acceleration of the decline. The next area stands at 1.3660/65 (March and April lows).
A recovery above 1.4020 is needed to change the short-term bias to the upside. Before that level, a strong resistance emerges at 1.3890 and 1.3950.