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GBP/USD is up, up and bears blown away 281 pips

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 17, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    GBP/USD made a high of 1.4505 earlier today while the greenback continues to feel the pressures with Yellen leaning over its shoulder given yesterday's surprisingly bearish, dovish and cautionary tone.

    The statement's language expressed concerns about Global growth and the dot ploy was revised so the effect that we may not see more than two hike this year for a 0.5% increase by the end of the year, if any at all if global economic conditions continue to deteriorate. At the same time, underpinning the strength in the pound, the BoE's was not as dovish as expected.

    The BoE held rates as expected at 0.5% with a unanimous 9-0 vote. However, there was not much of an impact before the US really got going and in the London afternoon, "GBP's relative under performance is telling and underscores the ongoing impact of Brexit risk, one of the key components of our bearish GBP forecast with a Q2 target of 1.35", explained analysts at Scotiabank. However...just when we thought it was all over...

    GBP/USD price action

    Sterling was in favour with the US bulls into the London afternoon and we cleared the 55 dma at 1.4326 with ease, with a slight pull back to find more bids and then did not look back until he mid way point on the 1.44 handle for a hard grind to find the 1.45 handle for a 281 pip gain on the day.
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