Back on Monday, the GBP/USD major recorded an upward hike. This was perceived as a direct reaction of the previous week’s sell off from the 1.4480 thresholds. Despite the absence of fresh news in regarding the Brexit in correlation with a weak US start, the pound never hesitated to make its point on Monday.
The last week’s trend went up from 1.4051 and met the real supply at 1.4515. However, it re-balanced abruptly at 1.4055, thereby breaking the main technical resistance line in the four-hour chart at 1.4208 and posting fresh highs in the reversal from 1.4281.
Right from the beginning, the price was supported by a weak tone in the greenback across the board. This was mostly experienced after poor US data got released. The data included; combined results coming from the trade balance part, the personal income and spending index not forgetting the inflation measured through the Personal Consumption Expenditure (PCE).
Unlike what was predicted, the US Pending Home Sales came out during the month of February, recording a 3.5% expansion rate against the 3.0% growth in January. On Tuesday, the USD/JPY pair strengthened its upward trend during the day. The pair’s price was inclining around the 110.81 thresholds. Nevertheless, the ascension and daily postings went as high as 113.67.
According to the analysts, the whole week streak might terminate since the markets are now taking a step back with respect to the US economy and its inflation targets come around, Fed marching toward continuous monetary rate expansion.
The USD’s weakness is shifting between the figures in the US economy and the recent hawkish comments. The main comments cane from specific Fed members who publicly stated their opinions after the last week’s dovish tone following the FOMC (Federal Market Open Committee) press release.
A sharp drop was seen in the US dollar yesterday as Janet Yellen’s speech imposed more dovish tone in the market. The Fed Chair uttered that the central bank will continue taking caution with regards future rate hikes and the inflation target. This is simply the explanation as to why the recent pick-up in core inflation is too minor to be told whether the trend is long lasting or not.