- US Dollar reflation trade looks to be back in full force
- DXY Index snapped sharply lower to probe its 50-day MA
- GBP/USD price action eyed for bullish breakout potential
The US Dollar swooned on Tuesday and now trades in negative territory month-to-date following sharp declines over the last three consecutive sessions. US Dollar selling pressure was broad-based, though weakness relative to the Pound and Yen stood out in particular. GBP/USD price action spiked higher by about 75-pips while USD/JPY sank 65-pips.
GBP/USD price action now looks like it could be in the early stages of a breakout higher with technical resistance around the 1.3750-mark in the rearview mirror. That said, it appears there might be some open runway for Pound-Dollar bulls to push toward the 1.4000-handle. GBP/USD is expected to be one of the most active major currency pairs on Wednesday judging by its implied move of 54-pips. US Dollar volatility has the potential to accelerate in response to commentary expected from Federal Reserve Chair Jerome Powell during his speech scheduled for Wednesday, 10 February at 19:00 GMT.
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