GBP/USD attempts a bounce above 1.3750 amid higher yields, US dollar
- The cable continues to battle out rising Treasury yields and US dollar.
- The UK’s re-opening and vaccine progress keep a floor under the spot.
- Focus shifts to the US CB Consumer Confidence data for fresh cues.
GBP/USD is looking to extend its bounce above 1.3750 in the European session, as the US dollar extends its rise in tandem with the Treasury yields.
The US dollar trades at four-month highs against its main peers, taking cues from fresh leg higher in the Treasury yields across the curve, with the benchmark 10-year rates hitting 1.70% once again.
The returns on the market have resumed their uptrend, in the wake of higher inflation expectations, courtesy of a probable $3+ trillion infrastructure spending proposals likely to be announced by the Biden administration this Wednesday.
Also, higher vaccination rates in the US boost hopes for a quicker economic recovery, which offers an additional lift to the yields. Despite a solid rally in the US rates, the cable stands resilient, trading neutral around 1.3760, as of writing.
The easing of the covid restrictions in the UK and successful vaccine campaigns continue to lend support to the pound, putting a floor under GBP/USD. With the UK faring relatively well on the vaccination rates when compared to its European neighbors. PM Boris Johnson easing the "stay at home" message on Monday.
From Monday, it will be replaced in England with a message to stay local. People will be allowed to meet in groups of six outdoors and can resume outdoor sports such as basketball, tennis and golf, per CBS News.
Looking ahead, the spot will continue to pay close attention to the dynamics in the US dollar and yields ahead of the US CB Consumer Confidence data due later in the NA session.
GBP/USD: Technical levels
“Considering the bullish MACD, the latest corrective pullback eyes the 1.3800 threshold. However, the quote’s further upside will be challenged by the 100-SMA level of 1.3853. Meanwhile, the receding strength of the bullish MACD can recall the GBP/USD sellers if the quote drops below 1.3750,” FXStreet’s Anil Panchal explains.
GBP/USD: Additional levels
Reprinted from FXStreet,the copyright all reserved by the original author.
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