GBP/USD losses momentum and drops to 1.3400

  • Cable hits resistance below 1.3450 and retreats to the 1.3400 area.
  • US Dollar strengthens and trims daily losses as US yields rise further.

The GBP/USD pair pulled back during the American session, trimming daily gains. The greenback strengthened and moved off daily lows, sending cable far from the 2-week highs it reached earlier at 1.3442.

The pair dropped to 1.3398 and is marginally higher for the day. As of writing was hovering around 1.3400, under the 20-hour moving average. The short-term momentum turned to the downside.

The positive tone around the pound emerged yesterday after UK economic data (Stronger Service PMI) and extended today but eased during the last hours. A period of consolidation or further retreat if the price drops back below 1.3400 seem likely ahead of the Asian session.

Technical levels

To the upside, resistance levels might be located at 1.3445 (Jun 6 high) followed by 1.3480 (May 4 & 8 low) and 1.3615/20. On the downside, support could be seen at 1.3375, 1.3345/50 and 1.3320 (short-term uptrend line).

 

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