- GBP / USD gained strength and rose for the third day in a row on Wednesday.
- Some renewed sales biases in USD canceled out the softer British CPI report and remained favorable.
- BoE Governor Bailey’s testimony did little to provide momentum before the FOMC minutes.
The intraday USD sales bias accelerated at the start of the North American session and raised the GBP / USD pair to new session highs, closer to the 1.2300 mark.
The pair first fell slightly on Wednesday and fell to 1.2220 after lower-than-expected British consumer inflation figures were released for April. The decline turned out to be short-lived, but was rather quickly accepted amid the emergence of a new sales bias in US dollars.
Despite doubts about a possible COVID-19 vaccine, solid corporate profits strongly stimulated American equity futures and weighed on the relative safe haven status of the greenback. General weakness in the USD helped the pair return to positive territory for the third consecutive session.
The pound lost some traction after the Governor of the Bank of England, Andrew Bailey, did not rule out the possibility of negative interest rates. Bailey, along with three MPC members, testified before the Treasury Select Committee on the economic impact of the coronavirus.
Even from a technical point of view, the pair is struggling to find acceptance above the 50-day SMA, making it prudent to wait for some follow-up purchases beyond the highest of the day’s swing, around the 1.2300 mark. The move will confirm a 50-day SMA breakthrough and set the stage for a new near-term appreciation.
In the future, market players are now eagerly awaiting the publication of the minutes of the last FOMC meeting. The minutes will influence the price dynamics in USD and produce significant trading opportunities later in the US session.