The pair GBP/USD gained more than 60 pips in a matter of minutes, and returned to its highest level since mid-September at 1.3198.
After raising initial, the pair lost part of its gains and is now listed at 1.3173, up 0.29%, or 50 pips on the day. There were No catalysts to clear behind this recent movement and the flow of the end of the month seem to have created a strong selling pressure on the dollar.
The index of the dollar of EE.STATES quickly fell below 93 to touch its lowest level in 14 months and is now at 92.98, losing 0.24%. The fact that the measure has not been triggered by a fundamental development makes it more difficult to its sustainability. Earlier in the session, data from the united States came in mixed and were ignored by the participants.
The Chicago PMI declined to 58.9 in July from 65.7 in June and missed the consensus of market 60. On the other hand, the figures of sales of homes pending published by the National Association of Estate Agents showed that it increased by 1.5% in June exceeded consensus market of 1%. Later in the week, the BoE will announce their monetary policy decisions.
James Smith, an economist at ING, argues that a rise in rates this year is unlikely, and adds the change to aggressive recent is mainly designed just to get the markets taking into account the risk of stricter policies.
The RSI on the daily chart is getting close to 70, suggesting that the couple might make a technical correction before continuing its rise. With a daily close above 1.3200 (psychological level/daily maximum), the pair could aim for 1.3250 (a maximum of 16 of September) and 1.3345 (a maximum of 12 September).
On the negative side, supports could be seen at 1.3100/1.3095 (psychological level/daily minimum), 1.3000 (minimum of 26 of July) and 1.2950 (21 July).