GBP/USD fails gains near 1.3900, erases weekly gains
- US dollar gains momentum near the end of the week on higher US yields.
- GBP/USD unable to break key resistance again; upside remains limited.
The GBP/USD peaked on Friday at 1.3887, the highest level in a week, and then lost momentum. Near the end of the week, it is trading at 1.3840, around the same level it had a week ago, after erasing daily gains.
The greenback strengthened late on Friday, amid higher US yields and some risk aversion. The US 10-year yield rose to 1.35%, after opening the day around 1.30%. Economic data from the US showed higher than expected PPI inflation in August.
Next week’s US reports will be relevant. “Retail sales will give more information on how much goods consumption is slowing as the effect of the stimulus checks fade. Very strong US goods consumption is a key driver behind the global manufacturing overheating and pressure on global freight. US CPI inflation and regional business surveys will also be very interesting”, mentioned analysts at Danske Bank. The inflation figures will probably be the most important event.
Limited while under 1.3900
The GBP/USD again failed to break above 1.3900. The same situation happed last week and during mid-August. The area has become a critic level; while below the upside for cable will be limited, with a break higher clearing the way to more gains. On the flip side, the immediate support could be seen at 1.3830 followed by 1.3790 and 1.3750
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
