GBP/USD in focus as UK bonds implode
The recovery in the GBP/USD was starting to lose momentum at the time of writing, although it was not too far off the day's earlier highs. Are we going to see it fall more profoundly later on, and even see fresh lows in the cable? Or can the cable pull itself higher?
Price has come under a little bit of pressure around 1.0840 area, previously support. It tried to get above this zone the day before but failed.
It looks like the bond markets are imploding again in the UK. We have just seen UK bond yields surge higher with the long 30-year reaching 4.75%!
If we see a decisive move below 1.07 handle then that might trigger some stops and send the cable tumbling.
On the upside, a break above 1.0840 might trigger a short squeeze towards 1.10 handle.
As things stand, the GBP/USD's outlook is highly uncertain. The bulk of the selling might be done, but by no means that is to say it has bottomed out yet. Equally, there are not many obvious fundamental reasons to go long the cable except higher interest rate expectations and a severally oversold currency.
Traders thus need to remain nimble, whether they are bullish or bearish, long or short.
By Fawad Razaqzada on behalf of FOREX.com
Price has come under a little bit of pressure around 1.0840 area, previously support. It tried to get above this zone the day before but failed.
It looks like the bond markets are imploding again in the UK. We have just seen UK bond yields surge higher with the long 30-year reaching 4.75%!
If we see a decisive move below 1.07 handle then that might trigger some stops and send the cable tumbling.
On the upside, a break above 1.0840 might trigger a short squeeze towards 1.10 handle.
As things stand, the GBP/USD's outlook is highly uncertain. The bulk of the selling might be done, but by no means that is to say it has bottomed out yet. Equally, there are not many obvious fundamental reasons to go long the cable except higher interest rate expectations and a severally oversold currency.
Traders thus need to remain nimble, whether they are bullish or bearish, long or short.
By Fawad Razaqzada on behalf of FOREX.com
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