GBP/USD tumbles toward 1.3800 lowest in two weeks, as US Dollar soars
- DXY jumps above 91.00 to the highest level in a week.
- GBP/USD heads for a weekly loss after being unable to break 1.4000.
The GBP/USD accelerated the decline during the American session and tumbled to 1.3806, reaching the lowest level since April 16. The pair remains under pressure near the lows as the US dollar holds onto important daily gains.
The slide in GBP/USD was triggered by a rally of the US dollar across the board and amid a decline in equity prices. The DXY soared to 91.25, reaching weekly highs. The index gains 0.70% on Friday. In Wall Street, the Dow Jones drops by 0.75% and the Nasdaq by 0.60%.
Technical outlook
Friday’s slide during the American session deteriorated the outlook for the pound. Yohay Elam, Analyst at FXStreet, points out that all in all, “bulls are in the lead but lack absolute control.” He notes the daily chart shows the GBP/USD “is confined to range – from the double-bottom of 1.3670 to the quadruple top of 1.4010. The currency pair's recent upside drift has pushed it above the 50-day Simple Moving Average (SMA) and continues trading above the 100-day and 200-day SMAs. On the other hand, it has been unable to capture the broken uptrend support line that accompanied since late last year and until mid-March.”
Next week is a busy week for cable that could boost volatility with the Bank of England meeting and important US economic data that includes the Non-farm payrolls report on Friday.
Technical levels