The chart of the GBP/USD currency pair has shown a rally to reach the 1.21000 level, a 14-week high!
What happened in the market?
Trading on Wednesday saw a daily gain on the chart of around 200 pips over the highs reached last week.
This was driven by the market's reaction to the minutes of the FOMC meeting which clearly made the US dollar weaken even more.
In contrast to the Federal Reserve's (Fed) hawkish statements at the last meeting after raising interest rates, investors scrutinized the minute details that showed the majority of policymakers agreed to slow down the previously aggressive interest rate hikes.
The situation gave an advantage for the Pound to climb the price chart against the weak US dollar despite the risky development assessed in the UK.
The issue of Brexit is again in the spotlight with fears of tension between the Prime Minister and the Minister of Finance.
The GBP/USD chart which was seen showing a horizontal price movement in the Asian session yesterday around 1.18800 then made an increase past the resistance of 1.19400 before the 1.2000 zone that was tested last week was successfully broken through.
The price reached a high of around 1.20800 in the New York session before the rise continued in the Asian session today (Thursday) reaching a new high of 1.21000.
The bullish pattern is expected to continue into the following sessions with the latest high target for the price being at 1.22000 for a 15-week record high.
However, analysts do not rule out a change in the direction of downward prices again could occur with the risk of uncertainty in the UK as well as risk-off market sentiment driven by the development of Covid-19 in China which could strengthen the US dollar.
For the expected price drop again, the 1.2000 zone is seen to be the focus again and if it fails to bounce back, the drop will continue to the previous focus levels such as 1.19400 and 1.18800.
Further, the price may drop back to the 1.18000 zone which has been a price support since last week's trading.
