GBP/USD Falls Below 1.3400 Amid UK Bond Market Turmoil.
GBP/USD slides under 1.3400 amid UK bond market turbulence.
FUNDAMENTAL OVERVIEW:
GBP/USD continues its slide, trading below 1.3400 for the first time since early August, weighed down by renewed turmoil in the UK bond market. A sharp surge in long-dated gilt yields— with 30-year yields climbing to 5.68%, their highest since 1998 — has rattled investor confidence and battered the Pound.
Sterling is underperforming against major peers in a week light on UK data, with fiscal concerns and bond market volatility dominating sentiment. Traders now turn their focus to the Bank of England’s upcoming policy meeting, where speculation grows over the possibility of rate cuts.
However, caution remains after BoE MPC member Catherine Mann recently emphasized the need to keep interest rates restrictive for longer, warning against premature easing as UK inflation remains stubbornly persistent.
GBP/USD TECHNICAL ANALYSIS CHART:
Technical Overview:
GBP/USD is trading within a down channel.
GBP/USD is moving below all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Buying Zone, while the Stochastic oscillator suggests a Negative trend.
Immediate Resistance level: 1.3438
Immediate support level: 1.3282
HOW TO TRADE GBP/USD
After a significant rise, the GBP/USD currency pair experienced a sharp reversal after being rejected at a key resistance level. The price fell back to a support zone, from which it initially bounced. However, the bounce was short-lived, and the price soon fell aggressively, forming a Bearish Engulfing. Following this breakdown, a retest is possible before the decline extends toward the next support level.