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Back Above $1.3900 in Early Europe. UST Yields in Driving Seat.

GBP
MNI (London)
  • GBP/USD touched a high of $1.4005 in early Asia Friday before rate retreated, the move down gaining pace as the USD made general gains on the back of rising UST yields, the rate touching a low of $1.3864 before bouncing back to $1.3935 through the 1600GMT fix, settling between $1.3915/30 through to the close.
  • Rate consolidated around $1.3920 in early Asia, extended its recovery to $1.3950($1.3851 61.8% $1.4005-1.3864) as UST yields eased, only to drop back to $1.3896($1.3897 61.8% $1.3864-1.3950) as yields recovered.
  • Rate is trading back above $1.3900 into early Europe.
  • Support $1.3896, $1.3884(76.4%) ahead of $1.3864. Resistance remains at $1.3950/71 ahead of $1.3972(76.4%) ahead of $1.4005/17.
  • BOE Bailey appears on BBC R4 at 0810GMT. Focus this week on Thursday's BOE Monetary Policy announcement. Unchanged rates/QE widely expected. Focus on comments concerning economic outlook, vaccine rollout and the gradual lifting of restrictions should prompt some optimism.
  • UST yields remain the key driver for direction via USD strength.
  • MNI Techs: Friday's sell-off in GBPUSD suggests the end of the recent corrective bounce. The short-term outlook remains bearish following the sell-off between Feb 24 -Mar 5. An extension lower would open 1.3779, Mar 5 low ahead of a key bull channel support at 1.3759. The channel is drawn off the Nov 2, 2020 low and a break would represent an important short-term reversal. Firm resistance is 1.4017, Mar 4 high.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets

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