- Pound weakens after hitting multi-year highs versus dollar.
- GBP/USD continues to be unable to hold firmly above 1.3700.
The GBP/USD dropped further and bottomed at 1.3634, the lowest level in two days. Then it rebounded as US stocks trimmed losses and climbed to 1.3680. It is about to end the week hovering around 1.3660, up 80 pips from last week close.
The pound lost momentum after being unable again to hold above 1.3700. A stronger US dollar and a rally in EUR/GBP contributed to the retreat in GBP/USD.
Economic data from the US came in better-than-expected. Existing home sales climbed to the highest level in 14 years, and the flash estimate of the Markit PMIs rose unexpectedly. The data did not boost the greenback and helped equity markets. In Wall Street, the Dow Jones is falling by 0.54% and the Nasdaq 0.22%. Both indexes are off lows.
From a technical perspective, GBP/USD remains in a bullish trend. The pound continues to show difficulties in breaking and holding above 1.3700. It needs to consolidate above to clear the way to more gains, while below the odds of a more significant bearish correction will raise.