- GBP / USD caught some aggressive offers on Thursday and rallied around 150 pips intraday.
- The emergence of some new USD sales was seen as a key factor driving momentum.
- The disappointing release of US jobless claims data adds to the downward pressure from the USD.
The USD remained depressed during the early days of the American session and pushed the pair GBP/USD to new 34-month highs around the 1.3985 region after the US macroeconomic releases.
Having found some support near the 200 hourly SMA, the pair caught some aggressive offers on Thursday and has now recovered almost 150 pips from daily lows near the 1.3840 region. The strong intraday momentum was exclusively sponsored by the emergence of new sales around the US dollar.
The recent selloff in US Treasuries stalled after the FOMC meeting minutes, which appeared dovish, and revealed that the Fed will maintain its ultra-accommodative policy stance. A modest pullback in US Treasury yields was seen as one of the key factors undermining the dollar.
The US intraday selling bias accelerated following the release of the initial US Weekly Unemployment Claims, which unexpectedly rose to 861,000. This was worse than consensus estimates pointing to a drop to 765,000. In addition to this, the previous week’s reading was also revised up from 793,000 to 848,000.
Separately, the Philadelphia Fed nanufacturer index stood at 23.1 in February, as it was expected to drop to 20 from 26.5 earlier. However, this did little to impress USD bulls or cripple the GBP / USD strong move to the highest level since April 2018, closer to the key psychological level 1.4000.
Meanwhile, technical indicators on the short-term charts already show mild overbought conditions. This, in turn, justifies some short-term consolidation or a modest pullback before traders bullish position for an ongoing / well-established upward trajectory extension.
Technical levels
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