GBP/USD tumbles to four-week lows near 1.2300, pound under pressure

• US dollar gains momentum as Wall Street extends losses.
• Risk aversion hits the pound that also tumbles versus EUR and CHF.

Cable is falling sharply affected mainly by a rally of the US dollar across the board, while at the same time, the pound is lagging behind majors. GBP/USD tumbled to 1.2314, reaching the lowest since May 29.

The pair holds near the lows, down more than a hundred pips for the day and under pressure as the greenback shows strength. A quick slide in US equity prices boosted safe-haven assets. The DXY rose to 97.68, the highest in almost a week despite the rally in Treasuries. The US 10-year yield fell to 0.645%, the lowest level in four weeks.

The pound also tumbled against the euro and the Swiss franc, adding to the negative tone. EUR/GBP is about to test 0.9100 as it consolidation above a critical technical resistance. GBP/CHF dropped below 1.1700 to the lowest since late March.

Technical levels

On the downside, the next support for GBP/USD emerges at 1.2300, followed by 1.2285 and then 1.2245. A consolidation below 1.2350 would keep the pair under bearish pressure. On the upside, above 1.2365 is the immediate resistance and then comes 1.2400/05.