GBP/USD tumbles to five-day lows under 1.3450 as US dollar soars

• US dollar gains momentum during the American session as US yields rise.
• Cable trims last week gains moves further away from monthly highs.

The GBP/USD pair failed to hold above 1.3500 and tumbled, reaching 1.3428, the lowest level since last Wednesday. Cable remains near the daily low, under pressure amid a stronger US dollar across the board.

After a three-day rally, GBP/USD is falling sharply trimming last week gains. From the highest level in almost two months, it hit last week at 1.3551, cable is now under pressure, back under the 55-day simple moving average. The 1.3400/05 zone is the next support to consider.

The decline of GBP/USD took place amid a rally of the US dollar. The greenback benefited from higher US yields. The 10-year rose to 1.60%, the highest since November 26, the 30-year stands at 1.97% at the highest in a month. The 2-year Treasury yield reached the highest since March 2020.

Economic data released in the US showed no surprises. The final Markit Manufacturing PMI came in at 57.7, below the flash reading of 57.8. On Wednesday the ADP employment report is due and on Friday the non-farm payroll.

Technical levels