My expectations for the pound came off in full. The GBP/USD rose to 1.5335 at the US session. From a 1.5335 maximum, the pound rebounded to 45 degrees. For us to see a continuation of this strengthening against the dollar, we need to see it rebound lower.
If we take a look at the technical picture on the daily, the closest target is 1.5390. The fundamental side is bare, so I’ve gone for a GBP/USD rise to 1.5357 on my forecast. The CIF dollar rate is down due to a closure of long positions after the FOMC minutes were published.
The GBP/USD rate has stopped by the daily LB. The day will close above 1.5255, so I’m starting to consider us seeing a strengthening of the pound to 1.5395-1.5400.
After the FOMC minutes were published market participants decided to reduce long positions on the US dollar. A close of the weekly candle above 1.5260 will give us a false break in the trend line.