On the other side of the fence, the U.S. dollar has been enjoying a strong rally for the past few trading sessions after the FOMC meeting minutes revealed that the Fed was actually considering overlooking its employment and inflation targets. Recall that Fed Chairman Bernanke said previously said that the economy has stalled and that the expansion will just be moderate. However, in their latest monetary policy meeting minutes, policymakers showed more confidence in the economy and even suggested withdrawing asset purchases soon.
The pair’s breakdown below 1.5350 represents a pretty significant signal that pound bulls are no longer willing to defend the support zone. Unless Fed officials retract their recent hawkish remarks, the U.S. dollar could continue to be boosted by upbeat monetary policy expectations.
Meanwhile, weaker than expected figures from the U.K. could push GBP/USD all the way down to the 1.5000 major psychological support. If that level still breaks, GBP/USD could keep selling off until the next lows around 1.4300.
By Kate Curtis from Trader’s Way