The US dollar was seen moving weakly into the weekend trading session after the FOMC meeting early yesterday morning (Thursday) which saw an aggressive interest rate hike by the Federal Reserve (Fed) show the passive movement of the king of the currency.
After the interest rate hike by the Fed, US 10 -year bond yields showed a negative impact with a decline to 3.17% from 3.49% which has put pressure on the US dollar to strengthen.
Although the US dollar was seen moving weak after the FOMC meeting, investors remained wary of any possibility as market analysts remained expecting the strengthening of the US dollar to happen again after this.
The depreciation of the US dollar has made other currencies steal opportunities to make gains including the Pound which was seen strengthening over the weekend.
The pound moved strong in Thursday's trading making gains after the Bank of England (BOE) raised interest rates by 25 basis points to meet market expectations, bringing the latest current rate at 1.25%.
The result has driven the pound’s rise to rebound stronger from the 2 -year low it touched on Tuesday.
On the price chart of the GBP/USD pair, the price is seen to have made a rebound with a daily jump of around 360 pips recorded on Thursday yesterday further strengthening the expectations for the indicator for the previous bullish price signal.
After a 270 pips decline occurred last Tuesday testing the latest support zone for a 2 -year low price record, the price has made a rise on Wednesday to test the Moving Average 50 (MA50) resistance on the 1 hour time frame to signal a bullish trend change.
On Thursday yesterday, the price was initially seen to have made a slight decline in the Asian session and was supported at the MA50 level before continuing to rise in the European session with a significant price surge reaction exhibited in the New York session.
The bulls have reached a high of 1.24000, but started to retreat after testing the resistance with a continued decline in the Asian session this morning (Friday) to the 1.23000 zone.
If the rise manages to continue to maintain the bullish pattern displayed yesterday, the price is seen to test once again the resistance of 1.24000 reached yesterday before continuing higher towards the next target at 1.25000.
However, if the surge fails to be sustained and the price declines again, the RBS (resistance become support) levels at 1.22000 and 1.21000 will be the initial focus to test the price before the price can fall lower if the US dollar strengthens against the Pound.
The successful continued decline beyond these zones will then lead to a lower focus target level at 1.20000 after the price trend change is more clearly assessed by investors and is likely to once again reach this week's low of 1.19400.
