USD and GBP among the worst of the day

The pound and the US dollar fell in the market on Tuesday and are about to finish the day lower. Sterling opened the week showing weakens and today it continued to decline affected by Ian Mccafferty comments, a MPC member that said that the Bank of England should be ready to deliver more easing. In the US, mixed economic data did not affect the US dollar but a decline in US bond yields could have favored the downside.

The US Dollar index, which gauges the greenback against a basket of currencies dropped today for the first time after rising during the previous four trading days. During the Asian session it rose to 96.42, to test August highs but it weakened and turned to the downside, accelerating on American hours below 96.20.

It bottomed at 95.96 and then rose back above 96.00. It is about to end the day hovering around 96.06, still significantly above the level it had on Friday before the release of the US employment report.

The rally of the index remains capped by the 20-day moving average that stands at 96.40. A consolidation on top from a technical perspective could open the doors to more gains and probably for a test of 96.80, the next relevant resistance. On the opposite direction, the immediate key support could be seen around 95.90 (May highs).