The pair GBP / USD yesterday won the most from the next wave of dollar sales, adding 250 points to the price. As a result, the currency pair was able to break through the level of 1.43 this morning.
Such a strong growth of the currency pair was caused not only by the weakness of the dollar, which yesterday held a blow from the US Treasury, but also by the release of neutral data on the UK labor market, which in the end the market was still rated positively. Still, unemployment at historic lows and a slight acceleration of average wage growth without taking into account bonuses were perceived by investors as a signal to buy a currency pair, since such statistics may force the Bank of England to raise interest rates at upcoming meetings to limit increased inflation risks.
We are waiting for the next important news from the UK tomorrow, when GDP data will be known. Today, the dominant influence on the currency pair will probably remain behind the dollar index, which can still begin to adjust the next wave of sales.
A strong spurt upward has driven the RSI indicator into the overbought area, and now the currency pair is trying to develop a correction, trying to slightly defuse the situation and get out of the overbought area. Immediate support on which to expect the price is at the level of 1.42. Only after the breakdown of this mark can we expect a stronger price pullback. But in the longer term, the bullish trend with a long-term target of 1.45 remains dominant for us.
Review prepared by Fort Financial Services analytical department. Follow our publications!