GBP/USD slides to one-week lows near 1.2340 as Dollar strengthens

• US Dollar gains momentum as stocks slide and Treasury yields rise. 
• GBP/USD looks bearish, near the 1.2340 support. 

The GBP/USD broke below 1.2380 and tumbled to 1.2342, reaching the lowest level in a week amid a stronger US Dollar across the board. The Greenback gained momentum during the American session as US yields moved to the upside. 

From NFP to CPI 

The US Dollar Index is rising for the fourth consecutive session. It is hovering around 102.65, up 0.57% for the day, at the highest level in a week as it continues to bounce from monthly lows. 

Higher US yields are helping the Greenback on Monday following the latest US economic data. The US 10-year yield stands at 3.41%, a one-week high. After the release of the Nonfarm Payrolls report on Friday, market participants are turning their focus to the US Consumer Price Index number are out on Wednesday. After the NFP, the odds of another rate hike at the FOMC May meeting rose. 

The US Dollar is driving price action on Monday. Most European markets were closed. In Wall Street, the Dow Jones is falling 0.20%, and the Nasdaq drops by 1.25% after the first minutes of trading. 

Short-term outlook 

Technical indicators favor the downside for the moment; however, after the sharp decline, some consolidation and a rebound seem likely. A recovery above 1.2395 would alleviate the bearish pressure, while above 1.2440 the outlook would change to bullish. 

The immediate support is around the 1.2340 area. A break lower should point to further losses, targeting initially the 1.2290 support area followed by last week’s low at 1.2270.

Technical levels