GBP/USD Remains Under Pressure As Treasury Yields Move To New Highs

Key Insights

• GBP/USD is moving lower as demand for the safe-haven U.S. dollar stays strong. 
• Today, traders will focus on the dynamics of Treasury markets. 
• A move below 1.3030 will push GBP/USD towards the support at 1.3000.

British Pound Is Losing Ground Against U.S. Dollar

GBP/USD is currently trying to settle below the support at 1.3030, while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index settled above 100.50 and is moving towards the next resistance level at 100.85. In case the U.S. Dollar Index gets above this level, it will head towards the next resistance at 101.10, which will be bearish for GBP/USD.

There are no important economic reports scheduled to be released in the U.S. and UK today, so foreign exchange market traders will focus on general market sentiment and the dynamics of U.S. government bond markets.

The yield of 30-year Treasuries is moving towards the psychologically important 3.00% level. In case the yield of 30-year Treasuries gets above this level, the U.S. dollar may get more support.

Technical Analysis

GBP/USD is testing the support level at 1.3030. RSI is in the moderate territory, and there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

If GBP/USD manages to settle below the support at 1.3030, it will head towards the next support level at 1.3000. A move below this level will open the way to the test of the support at 1.2970. In case GBP/USD gets below 1.2970, it will head towards the support at 1.2940.

On the upside, GBP/USD needs to settle back above 1.3030 to have a chance to gain upside momentum in the near term. The next resistance level for GBP/USD is located at 1.3050.

In case GBP/USD settles above 1.3050, it will move towards the resistance at 1.3080. A successful test of this level will open the way to the test of the resistance at 1.3110.

For a look at all of today’s economic events, check out our economic calendar.