GBP/USD jumps above 1.3900 as USD plummets.
- US Dollar tumbled across the board while pound extended gains.
- GBP/USD gained more than a hundred pips, at the highest since the Brexit referendum.
- The 1.4000 region appears on the radar.
The pound was outperforming and recently rose even further with no particular catalyst behind. At the same time, the USD plummeted. The US Dollar Index (spot) reached a fresh 3-year low at 90.19.
The GBP/USD pair broke above 1.3840/50 and jumped to 1.3915, reaching a fresh post-referendum high. Then it pulled back and it was trading at 1.3905/10, up 120 pips for the day.
Pound’s crosses also had significant price action moves. EUR/GBP dropped to 0.8800, to test January lows after having started the day at 0.8900 while GBP/CHF rose to the highest in a month above 1.3330. GBP/JPY traded on top of 154.00 for the first time since June 2016.
GBP/USD Technical outlook
“The short-term picture for the pair is bullish, as in the 4 hours chart, the price bounced sharply after struggling with a bullish 20 SMA, holding near the mentioned high by the end of the US session. Technical indicators in the mentioned chart, are also supporting additional gains ahead with the RSI indicator heading higher within overbought territory and the Momentum also regaining the upside bouncing from its 100 level”, said Valeria Bednarik, Chief Analyst at FXStreet.
She warns that speculative interest seems determinate to test the 1.4000 threshold “a possible bullish target for the upcoming session, should the greenback remain under pressure.”