The Pound Sterling faces pressure against the US Dollar as rising US Treasury yields continue to support the Greenback. This follows the release of stronger-than-expected US Durable Goods figures. Currently, GBP/USD trades at 1.2444, representing a slight decline.
Key Factors:
- US Yields Fuel Dollar Strength: Rising US Treasury yields bolstered by positive economic data create a favorable environment for the USD, weighing on GBP/USD.
- Technical Outlook: A ‘morning star’ pattern offers a potential bullish signal but needs confirmation with a break above the April 23 high (1.2458).
Technical Analysis: Conflicting Signals
- Potential Bullish Reversal: The ‘morning star’ formation suggests a possible bullish reversal. However, a break above 1.2458 is needed for confirmation.
- Key Resistance: Initial resistance lies at the 200-day DMA (1.2561), followed by the 1.2600 psychological level.
- Downside Risks Remain: Failure to clear the April 23 high could trigger a retracement to 1.2400, with further downside potential towards the upslope support trendline near 1.2250/60.
Outlook:
GBP/USD remains poised at a crossroads. A decisive break above 1.2458 is needed to confirm bullish momentum, while a failure to do so could reignite selling pressure with an eye on crucial support levels.