GBP/USD fails to hold above 1.29 as greenback recovers

The GBP/USD pair came under a renewed selling pressure in the late US afternoon and dropped below 1.29 as the greenback started to gain strength against its major rivals amid rising Treasury bond yields. As of writing, the pair was trading at 1.2887, down 0.5% on the day.

The US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, approached the 99 handle again after having failed to hold above that level earlier in the European session. The recent rise witnessed in the index was driven by the upsurge in the 10-year T-bond yield, which reached a daily high at 2.238%, rising nearly 2%. U.S. Treasury Secretary Steven Mnuchin on Monday suggested that the U.S. economy could reach a 3% growth rate in two years with the new tax-reform and the improved risk sentiment decreased the demand for safe haven Treasuries, boosting their yields.

Today's data from the U.S. caused some short-term reaction but the negative impact on the greenback didn't last long.. The only data worth mentioning from the U.K on Tuesday is the Markit Manufacturing PMI. The economic docket in the U.S. won't be offering any data that could potentially impact the price action. 

• US: Personal income increased $40.0 billion (0.2%) in March

Technical outlook

1.2900 (psychological level) now can be seen as the first hurdle ahead of 1.2955/60 (Apr. 28 high/Oct. 4 high) and 1.30 (psychological level). On the downside, supports are located at 1.2840 (Apr. 27 low), 1.2760 (Apr. 21 low) and finally 1.2700 (psychological level).

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