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Early Focus on UK Employment Data

GBP
MNI (London)
  • GBP struggled to keep pace with EUR/USD's recovery Monday, allowing EUR/GBP to edge back above Gbp0.8600 as well as holding above its key 10-dma which is seen providing a bearish undertone for the pound.
  • GBP/USD edged away from its Asia low of $1.3818 to $1.3877 ahead of NY, dropped back to mark a NY low of $1.3821 before it edged back to $1.3872, closing the day around $1.3864.
  • UK/EU COVID vaccine spat, along with upcoming Scotland election (result could support another referendum vote) provided the main negative weight vs the pound.
  • Early consolidation in Asia before rate was pressured lower on the back of EUR/USD slippage and the negative react to the NZ Govt acting to cap NZ house prices. GBP/USD was pressed to $1.3822 with recovery efforts capped just below $1.3840 into Europe.
  • EUR/GBP remains above its 10-dma (current Gbp0.8579), turns near term outlook positive with the top of the 1.0% 10-dma envelope noted at Gbp0.8665.
  • UK Employment/Earnings at 0700GMT, CBI Trends 1100GMT.
  • US Fed Powell and US Tr.Sec Yellen appear before House Panel on CARES act 1600GMT
  • GBP/USD support $1.3820/00, break opens deeper move toward $1.3780/70 ahead of $1.3750 and $1.3737/35.
  • MNI Techs: The pair remains below resistance at 1.4005, Mar 12 high and at the lower end of its recent range. Attention is on support at 1.3779, Mar 5 low. A key bull channel support intersects at 1.3816 today. The channel is drawn off the Nov 2, 2020 low. A clear break of both support levels would represent an important S/T reversal. This would open the 1.3700 and below. For bulls, a break of 1.4005 is needed to reinstate a bullish theme.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets

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