GBP/USD trims losses as the US dollar pulls back, remains in the range
- Cable fails again to hold above 1.4200 and corrects lower.
- GBP/USD keeps moving in a consolidation range between 1.4100 and 1.4200.
The GBP/USD bottomed before the release of US data at 1.4135 amid a rally of the US dollar across the board. Afterward, the greenback lost strength favoring a rebound in cable back above 1.4150.
The intraday bias still points to the downside in GBP/USD but the bearish pressure eased significantly. The economic data from the US came in mostly above expectations. The US dollar at first extended gains and later pulled back, amid a decline in US yields.
The rebound of the pound has been more limited than other currencies. Despite GBP/USD moving off lows, EUR/GBP rose back above 0.8600, reflecting some weakness in the British currency.
The DXY is sharply off highs. Earlier on Friday, it peaked at 90.45, the highest since May 17 and it is moving back toward 90.10. At the same time, the 10-year yield fell to 1.58% after testing the 1.62% area for hours.
From a technical perspective, GBP/USD continues to move sideways, in a consolidation range. Despite the first close above 1.4200 in years on Thursday, the pair failed to hold and pulled back. It needs a clear break above 1.4250 to open the doors to more gains. On the flip side, the key support is the 1.4100 zone. A close below would suggest a stepper correction ahead.
Technical levels