Technical Analysis

Cable closes in on 1.3600 as dollar stays softer on the day

GBP/USD stays in the hunt for a third straight day of gains

The dollar’s lackluster performance today is a bit of a tough one to decipher as equities are leaning towards being more cautious while Treasury yields are up for the first time in four days (10-year yields up 2.9 bps to 1.496% currently).

Still, the greenback is being offered across the board (except against the yen) with GBP/USD now climbing to a session high of 1.3598.

Of note, the pair is contesting a potential break back above its 200-hour moving average (blue line) @ 1.3593. Hold a firm break above that and buyers will seize near-term control and keep more poised for a potentially higher bounce.

But there is some added resistance nearby from the 38.2 retracement level of the recent swing move lower @ 1.3603 so preferably buyers need to clear that too. After that, gains could potentially stretch further towards the 50.0 retracement level @ 1.3663.

That being said, a further resurgence in Treasury yields may come back to bite at dollar sellers so keep an eye on the bond market in case. That will be a key spot which could provide a tailwind for dollar buyers to come back into the picture soon enough.

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