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GBP/USD jumps back above 1.4200

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 21, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Córdoba) - A strong bounce in equities and in crude oil prices boosted the pound against the US dollar and also versus the euro. GBP/USD has risen 150 pips from the lows and reached a 2-day high.

    A strong bounce

    The pair bottomed earlier at 1.4078, 6-year low and then turned to the upside. Mario Draghi triggered a rally in stocks after he signaled that the European Central Bank could announce more stimulus measures at the next meeting in March.

    The pound recovered strength with risk appetite, particularly versus the euro that plummeted in the market.

    Recently stocks rose further and GBP/USD broke above 1.4200. It peaked at 1.4227, hitting a 2-day high. Currently, it trades at 1.4215/20, up 30 pips from yesterday’s closing price. It is about to rise for the second day in a row.

    Will it hold?

    GBP/USD is rising sharply after being rejected from levels under 1.4100. It is making a firm reversal. If it manages to hold around current levels it could give the first signal in a month of a temporal bottom. It could remove bearish pressure at least for a few day.

    Still, every rally of the pair so far is likely to be considered as a correction. The main trend continues to favor the US dollar.
    For more information, read our latest forex news.

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