GBP/USD recovers losses, treasury yields surrender gains
|- GBP/USD recovers from session lows.
- Treasury yields retreat from multi-year highs.
GBP/USD found takers at the daily low of 1.3857 and moved higher to 1.3896, possibly due the 10-year treasury yield surrendering the daily gains.
As of writing, the spot is exchanging hands at 1.3890. The 10-year yield clocked a high of 2.67 percent; the highest level since July 2014 despite US government shutdown. However, the yield has backed off from the multi-year highs and was last seen trading largely unchanged on the day at 2.64 percent.
This seems to have put a bid under cable, despite Friday's disappointing UK retail sales release. So, is Pound set to test 1.40 soon? Kathy Lien from BK Asset Management says, "UK data has taken a turn for the worse with consumer price growth slowing year over year and retail sales taking a nosedive in the month of December. This does not bode well for next week's fourth-quarter GDP report as spending slowed in the last 3 months of the year."
Lien adds that Pound could slip to 1.37 if the UK wage growth numbers due this week disappoint expectations.
GBP/USD Technical Outlook
Jim Langlands from FXCharts prefers to buy the dips as the long run charts remain bullish.
|
Resistance |
|
Support |
|
|
1.4000 |
Psychological |
1.3850 |
Minor |
|
1.3975 |
Minor |
1.3838 |
Friday low |
|
1.3942/44 |
17 Jan high/Friday high |
1.3825 |
Minor |
|
1.3913 |
18 Jan high |
1.3805 |
18 Jan low |
|
1.3885 |
Minor |
1.3756 |
17 Jan low |
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