GBP/USD rally losses strength near 1.4000

GBP/USD accelerated to the upside after breaking key technical levels
Pound heads for highest close in two weeks.
Rally supported by a weak USD.

Matías Salord FXStreet

GBP/USD extended gains during the US session and reached a fresh 2-week high at 1.3993. Afterward pulled back modestly and it was trading at 1.3965/70, up more than 50 pips for the day.

A weak US dollar across the board boosted the pair. The greenback started to slide after US inflation data (no positive surprise) and following political news from the US with President Trump selecting Mike Pompeo as Secretary of State, replacing Rex Tillerson.

In the UK, the Office for Budget Responsibility offered new economic projections and revised upwards GDP estimates for 2018. It helped the pound during the European session.

GBP/USD breaks key technical level

The pound is headed for the third gain in a row but today’s rally so far is being particularity positive from a technical perspective. GBP/USD broke a downtrend line from January highs and also consolidated on top of 1.3900.

The bullish tone remains intact although the rally stopped below 1.4000. The 1.4000 is a strong resistance area, also a psychological level. A break above would clear the way to more gains.

A slide back below 1.3950 would remove most of the short-term positive tone for the pound. Below support levels lie at 1.3915 and 1.3870. A relevant level is the uptrend line from February lows that stands at 1.3830 that is supporting the current up-move.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

EUR/USD looks well bid above 1.1600

EUR/USD extends its recovery and climbs back above the 1.1600 mark in quite an auspicious start to the week. Improved risk appetite following the US-Iran agreement to reopen the Strait of Hormuz continues to weigh on the US Dollar, lending support to the risk complex. Looking ahead, investors are likely to remain on the sidelines ahead of Wednesday's FOMC meeting.

GBP/USD climbs to multi-day highs around 1.3460

GBP/USD remains comfortably in positive territory north of 1.3400 the figure on Monday. Cable continues to draw support from an improvement in market sentiment after reports that the US and Iran have reached a framework agreement aimed at ending the conflict and reopening the Strait of Hormuz.

Gold extends the recovery, targets $4,400

Gold rallies on Monday and climbs well above the $4,300 mark per troy ounce. The precious metal benefits from renewed selling pressure on the Greenback as investors reassess the implications of the US-Iran agreement to end hostilities and reopen the Strait of Hormuz. Market participants now turn their attention to Wednesday's FOMC gathering.