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GBPUSD extends rally, tests resistance between 1.3446 and 1.3465

The move comes after weaker-than-expected U.S. PPI reinforced a disinflation outlook, pulling the dollar lower and nudging the two-year Treasury yield down about 4 basis points.

Reported · Written up by our desk · Major Pairs

GBPUSD extended its rally to a new session high, building on earlier gains after U.S. Producer Price Index data came in weaker than expected, which boosted expectations that inflation pressures are continuing to ease, according to Forexlive.

The softer U.S. inflation narrative coincided with another wave of U.S. dollar selling, while Treasury yields also fell, with the two-year yield dropping around 4 basis points as traders reduced near-term expectations for Federal Reserve tightening.

Technically, the pair has reached the 61.8% retracement of the decline from the May 1 high and is challenging a series of highs capped since June 10.

The latest run is now testing a resistance zone between 1.3446 and 1.3465, with a key retracement level at 1.34598, and a sustained break above 1.3465 could shift focus to higher levels near 1.34854 and 1.35089.

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