GBP/USD slumps 2-week lows near 1.3370 as USD shoots higher

The GBP/USD pair accelerated declines on a break below 1.3400 psychological support, now meandering near two-week troughs of 1.3370, as the bears eye a break below 20-DMA support located at 1.3358.

GBP/USD: Eyes on US data, Fedspeaks

The spot extends its retreat and is now down almost a big figure from the Asian session tops, mainly in response to increased demand for the greenback across the board. Markets prefer to hold the US currency after the Fed Chair Yellen’s hawkish remarks, as the Fed remains the only central bank that is on track for further interest rate rises.

The latest leg up in the US dollar against its main rivals can be attributed to renewed buying seen in Treasury yields across the curve, as the European traders react positively to the overnight ‘hawkish catch’ from Yellen, citing that the Fed should be wary of moving too gradually.

Moreover, the US dollar continues to derive support from the latest news that the US President Trump is likely to announce a cut in corporate tax to 20%. Meanwhile, markets expect a solid rebound in the US durable goods data, which should also remain USD-supportive.

GBP/USD levels to consider             

According to Haresh Menghani, Analyst at FXStreet, “Below 1.3400 support the pair remains on track to accelerate the fall towards 38.2% Fibonacci retracement level support near the 1.3325-20 region. On the upside, any up-move back above 1.3450 level might now confront strong resistance near the 1.3490-1.3500 region, which if cleared might trigger a short-covering bounce back towards 1.3575-80 horizontal resistance.”