GBPUSD Has a Flash Run
The pound spent much of the day yesterday moving within the weekly range and under the 1.38 region. It was only later in the day, around the London fix, that a huge bid seem to come into the markets and this pushed the pair through the 1.38 and the move did not stop there. Another huge bid seemed to come into the market as the prices pushed through the 1.39 region and on towards 1.3950 region and for a brief while, it appeared as though the 1.40 region was only a matter of formality. This region of 1.40 is a round figure and hence is likely to attract the prices in due course of time but what happened next has brought it a lot of uncertainty.
A period of correction set into the pound and though this is natural for any kind of large move, this correction has since basically reversed the entire move upwards and we now see the pair trading just above the 1.38 region as of this writing. This has nullified the move higher and the traders do not know what to make of this move as it was not based on economic data or any other such fundamentals. The market is holding the pound higher in the hope that the Brexit process would lead to a soft Brexit and the BOE would also help the economy along by bringing in rate hikes at appropriate points of time.
Looking ahead to the rest of the day, we do not have any major news from the US or the UK and hence, we can expect some consolidation in the 1.38 region and we believe that we should see another visit to the highs quite soon.