GBP/USD lost its traction after rising above 1.36 in early European trading and reversing down to 1.3560. Ahead of the release of US economic data and testimony from the head of the Fed, the US dollar index managed to erase its losses and rose above 94.00, reflecting the renewed strength of the US dollar.
GBP/USD briefly made a significant recovery on Monday and erased most of last week’s losses before finally turning down into a consolidation phase on Tuesday.
Amid the lack of macroeconomic data out and fresh news from Brexit, the movement of GBP/USD is determined by technical developments in the charts and statements from BoE officials.
BoE Governor Andrew Bailey while speaking at a virtual event organized by the BoE repeated that they will only act to raise interest rates if they see clear evidence of rising inflation that has entered into wages. Andrew Bailey’s statement added to the downside pressure on GBP/USD.
The nearest “support” awaits at 1.3520 which if successfully passed will continue to 1.3500 and then 1.3475.
The nearest “resistance” awaits at 1.3570 which if successfully passed will continue to 1.3630 and then 1.3660.