GBP/USD retreats further below 1.3650 evens as the US dollar weakens

• Pound underperforming during the American session.
• GBP/USD reverses from multi-year highs, erases daily gains.

The GBP/USD dropped further during the American session and fell to 1.3626, almost a hundred pips below the two-year high it reached earlier on Wednesday at 1.3718. The pound failed to hold to gains and retreat sharply.

During the last hours, the pound has fallen across the board with EUR/GBP making a big comeback, recovering the 0.8860 key support area. The currency remains under pressure. Hours ago, it was the best performer supported by risk appetite and higher-than-expected UK inflation data.

The greenback is under pressure, particularly against commodity currencies. Wall Street is at record highs. The Dow Jones is up by 0.69% and the Nasdaq 1.70%, boosted by Q4 results.

In the US, Joe Biden will take his oaths of office in a few minutes. He is expected later today so sign its first executive orders, undoing some policies from the Trump administration.

From a technical perspective, GBP/USD failed again to hold above 1.37. The 1.3700/20 area has become a major barrier. A consolidation above would open the door to more gains. On the flip side, 1.3620 is the immediate support is seen followed by 1.3580.

Technical levels