GBP/USD retraces gains to mid-1.29s as USD sell-off eases
Boosted by the unabated selling pressure seen on the greenback, the GBP/USD pair rose to its 7-day high at 1.2990 during the opening hours of the NA session on Wednesday, The pair lost some of its bullish momentum before touching the important 1.30 handle, and is now trading at 1.2950, still up 0.27% on the day.
The US Dollar Index dropped to its lowest level at 97.44 since Trump's election victory in November as the political turmoil surrounding the Trump administration reached a new level after a congressman called for an impeachment, suggesting that the president engaged in obstruction of justice by leaking classified information to Russian officials. The risk aversion increased the demand for safer U.S. Treasuries, weighing on their yields and hurting the greenback.
- U.S. Treasury yields fall amid flight to safety
After the initial drop, the index started to consolidate its losses and is now at 97.53, down 0.6% on the day. However, this seems to be nothing more than a technical correction as the investors remain on the edge, awaiting new developments. There are no noteworthy data to be released in the remainder of the session.
- US Rep. Al Green: The President must be impeached
- US Rep. Adam Schiff: Impeachment cannot be perceived as an effort to nullify the election by other means
Technical outlook
The immediate hurdle for the pair aligns at 1.3000 (psychological level) ahead of 1.3060 (Sept. 28 high) and 1.3100 (psychological level). To the downside, supports could be seen at 1.2915 (20-DMA/daily low), 1.2845 (May 12 low) and 1.2770 (Apr. 24 low).