The GBP/USD price is tilting lower after the US Senate passed the ambitious stimulus package. The pair is trading at 1.3832, which is slightly above last week’s low of 1.3780.
What happened: The biggest focus today is the stimulus package that was passed during the weekend. During the negotiations, there was a probability that the Senate would pass the deal.
Still, analysts were concerned about two Senators from relatively conservative states. With the deal passed, focus now shifts to economic recovery, which will be swift since the US is still accelerating its vaccination process.
Also, investors are still watching the bond market. Today, the yield on the 10-year Treasury bonds rose to above 1.57%, the highest level in more than a year. While the yield on UK Gilts declined on Friday, there is also a possibility that they will rise today.
The four-hour chart shows that the GBPUSD price has formed a head and shoulders pattern. The neckline of this pattern is at 1.3860. The price has also moved below the 15-period and 25-period moving averages. Also, the two lines of the MACD pattern are below the neutral line.
Therefore, the pair may continue declining as investors focus on the next key support at 1.3700. However, a move above 1.3900 will invalidate this trend.
GBPUSD technical chart