GBP/USD retreats from six-day highs to the 1.3600 zone

• Pound off highs holds onto daily gains versus US dollar.
• DXY drops for the third consecutive day, despite higher US yields.

The GBP/USD is rising for the third consecutive day and is hovering around 1.3600.  Cable printed a six-day high at 1.3639, before pulling back. A decline of the US dollar across the board boosted the pair.

The greenback continues to correct lower after last week’s rally. The DXY is down by 0.25% at 93.80, off lows but still with a bearish short-term bias while the dominant trend continues to point to the upside.

US yields are moving sideways on Monday, modestly higher. Equity prices have recently tuned lower in Wall Street, offering support to the dollar. Economy data from the US came in above expectations with factory orders rising 1.2% in August, above the 0.9% expected. Over the next days, CPI and unemployment data will be key and could have a large impact across financial markets.

The pound is also up on Monday versus the euro as fuel shortages across the UK eased. The situation with the energy crisis has improved. The EUR/GBP is now under 0.8550.

GBP/USD and the 1.3600 area

The GBP/USD so far has been unable to recover clearly 1.3600. If it manages to do it, it could gain further strength for an extension to the 20-day simple moving average that stands at 1.3685.

A failure around current levels should keep the pair with a clear bearish bias. The immediate support is seen at 1.3575, followed by 1.3520 and 1.3480.

Technical levels