GBP/USD fails to recover 1.3900 and losses strength
- Pound erases losses across the board during the American session.
- GBP/USD rebounds from 1.3800 found resistance under 1.3900.
The GBP/USD dropped earlier on Tuesday to 1.3807, hitting a one-week low and then rebounded and climbed to 1.3895 during the American session. The recovery lost momentum, and as of writing, it trades at 1.3880, modestly lower for the day.
On a mixed day for markets and currencies, the pound is having a two-part day. Initially, it was hit by probably by comments from the Bank of England governor and after the European Union launched legal action gains the UK for the Northern Ireland protocol. During the second half of the day, the pound erased most of its losses.
Economic data in the US came in below expectations, with retail sales falling more than expected and Industrial Production unexpectedly contraction. The numbers boosted the yen, but also the dollar gained some ground.
While the DXY trades at daily highs near 92.00, GPB/USD is in neutral territory and EUR/USD at fresh weekly lows. The best performer among European majors is the Swiss franc.
Market participants await the outcome of the two-day FOMC meeting. On Wednesday, the US central bank will announce its decision on monetary policy. On Thursday will be the turn of the Bank of England. No change in the current stance is expected; the focus will be on the central banks' reaction to the recent increase in bond yields.
Technical levels