GBP/USD falls to a low of 1.3840 on the day
The dollar continues to hold more resilient in European morning trade today, bouncing off the lows yesterday with Treasury yields keeping steadier.
The dollar’s advance is evident against the pound, loonie, aussie and kiwi with the former seeing a bit more of a noticeable drop in the past hour.
Cable has fallen from around 1.3900 to start the session to 1.3840 and is testing some support from a near-term trendline around 1.3847 for the time being.
The 100-hour moving average (red line) sits just below that @ 1.3829. Keep above that and buyers will continue to hold a more bullish near-term bias.
Although the pound is proving to be resilient, the dollar’s strength as of late has proven to be a bit of a sticking point – especially if yields continue to push the issue.
That will remain the key spot to watch in trading this week. 10-year Treasury yields are little changed now but well off earlier lows, at 1.707% currently.
In the bigger picture, the pound and dollar share some similar fundamentals at the moment given how the vaccine rollout is panning out. As such, there are other pairs more suited to capitalise on that rather than the push and pull in cable.