The US dollar showed a rebound in the New York session yesterday after starting trading weakly at the market opening earlier this week.
The rebound in US 10-year treasury yields above the 1.50% level is seen to support the re-strengthening of the US dollar.
However, while other major currencies received initial pressure on the strengthening displayed by the US dollar, the Pound managed to post a strengthening supported by the speech of the Governor of the Bank of England (BOE).
While warning of a UK economic recovery, Governor Andrew Bailey noted that meeting members examined factors that could drive up inflation and supported the central bank’s hawkish statement at last week’s meeting.
On the price chart of the GBP/USD pair, the price is seen still struggling to jump past the resistance of 1.37000.
After yesterday's rise above 1.37000, the price hovered slowly again at that level until continuing to trade the Asian session this morning.
After the price started moving above the Moving Average 50 (MA50) barrier level on the 1 -hour time frame, investors are now waiting for clearer signals for the movement of the price bullish trend.
To continue the bullish trend, the price will rise past the high of 1.37500, which is the level reached during the price spike after the BOE policy meeting last week.
The next price increase will go towards the SBR (support become resistance) zone of 1.38000 and if the upside momentum is successfully maintained, the price can reach the high level of 1.39000 again.
On the other hand, if the price still fails to continue rising above the level of 1.37000, the decline is expected to head back to the support zone of 1.36000 which had previously supported the rise again last August.
The lower drop below the support zone will record the latest low since January is expected to reach around 1.35000.
