The GBP/USD currency pair is looking quite bullish these days. In the early hours of Wednesday Asian time, it was under notable selling pressure. The major sideways target area for GBP/USD on the upside is clearly seen as being above 1.3550. The pair found sellers near the 1.3480 level, likely marking just a temporary rejection of its bullish trend.
The recent strength of the Greenback has led to considerable fluctuations in the nominal exchange rate. Perhaps most fundamental, these changes are particularly amplified between the Pound Sterling and the U.S. dollar. Last week’s economic indicators from the United States continued the trend, further strengthening faith in the American currency. Consequently, the combination of these factors has played into a strengthening of the Greenback versus the Pound Sterling, if only in the short-term.
In fact, on the very same trading day, traders shifted their attention to kiwi (NZD/USD). This currency pair does not tend to move in lockstep with GBP/USD. The NZD/USD cross is now moving in the direction of 0.6000. This political change follows an RBNZ policy switch earlier this month. Market participants are clearly interested in the potential development. They will be paying very close attention to comments from Acting Governor Hawkesby for clues into any future interest rate paths.
While GBP/USD maintains a bullish sentiment, the presence of sellers around 1.3480 suggests that traders are cautious and actively reacting to market conditions. Psychological level at 1.3550 provides key resistance line for GBP/USD on its path to additional upside.
Market analysts will be closely watching how this new balance of influence between economic fundamentals and monetary policy from the central banks plays out in the currency markets. The longer term strength of the Greenback will likely limit GBP/USD’s ability to establish upward momentum in the long run.