US long-term yield of the 10-year bonds reached its highs at the end of last week, but the dollar is still being supported, so it continues to appreciate. However, Monday's decisions may be deceptive, because in Germany the Pentecost is celebrated and the macroeconomic calendar of the main economies is empty.
The rising yield of the 10-year US bonds and the situation on the British political scene with the fatal position of Theresa May's ruling cabinet do not help GBP. It is likely that it will be in vain to seek help in the inflation data (due on Wednesday), when the extinguishing effects of the GBP uptrend depreciation will push underlying inflation lower. Higher hopes are for the April retail sales ( due on Thursday), where a strong rebound is expected after terrible data for March. In addition, the buzz associated with the Brexit negotiations increases the volatility of GBP and in both directions, so it would be smart for global investors to leave GBP in peace temporarily until the data provide a basis for a more stable appreciation.
Nevertheless, let's take a look at the GBP/USD technical picture at the daily time frame. The pound needs strong data release if it is to stop the ongoing downward price spiral. GBP/USD is the lowest this year at the start of this trading week. At 1.34, the average 55-week rating is being tested, but the fact that the rate has not made any rebound from the previous 1.35 lows and continues to drop is certainly not a sign of the strength of high demand for the pound . The next weekly target for the market might even be at the level of 1.3181 (50% Fibo).
