Pound bounced sharply from a daily low of 1.4193 against the greenback, and trades around its daily opening. The improved market sentiment which fueled local share markets after the long holiday, is helping the UK currency to retain its latest gains, despite the lack of local macroeconomic data.
Later on today, FED's Yellen will speak of monetary policy in a private event, and investors will be looking there for her wording, given that after the ultra-dovish tone of the latest FOMC statement, officers have been for the most hawkish, pledging to remain in the tightening path. If Yellen boards the hawkish train, the dollar may get a strong boost across the board.
In the meantime, the 4 hours chart shows that the GBP/USD pair presents a bullish tone, with the price advancing firmly above a bullish 20 SMA, and the technical indicators regaining the upside within positive territory. Also, the price us currently aiming to recover above its 200 EMA, after breaking below it late last week.
At this point, the price needs to advance above 1.4285, the 50% retracement of the latest daily decline, to confirm additional gains up to the 1.4330/40 region, the 61.8% retracement of the same decline. Deeps are being seen as buying opportunities, with only a downward extension below the mentioned daily low supporting a continued decline towards 1.4140.
View the live chart of the GBP/USD
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