GBP/USD Price Analysis: Bears engage at a key 61.8% ratio
|- GBP/USD bears firm-up in early Asia and eye a test below 1.1300.
- There are risks of lower still while below a 61.8% ratio on the hourly chart.
GBP/USD has come under pressure to test the 1.1300 level following a resurgence in the US dollar on Wednesday. The US dollar index, DXY, was last seen up near to 1% at 111.21 but it had been as high as 111.735 overnight.
US yields rallying has helped to prop up the US dollar as the money markets price out overall optimistic speculation over a Federal Reserve pivot. The yield on the US 10-year note was up a high of 3.78%.
The following illustrates the price action across the assets resulting in the sell-off in the pound and offers scenarios for the rest of the week leading to the Nonfarm Payrolls event on Friday.
US yields
US dollar
The greenback, as measured by the DXY index, has consequently rallied on the day but corrected into a support structure.
This structure would be expected to see the index extend the bullish correction and move in on the 112 area.
GBP/USD H1 chart
GBP/USD will remain bearish while below the 61.8% Fibonacci retracement level near 1.1350 and there are prospects of a downside continuation for the day ahead putting heat on committed bulls near 1.1200.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.