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GBP Mild Buoyancy Despite Expectations COVID Easing to be Delayed

GBP
MNI (London)
  • Weekend/pre FOMC position adjustments were cited for the USD's recovery Friday, with risk remaining buoyant per equities.
  • GBP/USD eased from Friday's high of $1.4185 to an eventual low of $1.4096, recovered to $1.4119 before closing the week at $1.4107.
  • Move lower trailed EUR/USD's deeper pullback, allowed EUR/GBP to ease and close back below its key 10-dma (current Gbp0.8599) which is seen providing some underlying buoyancy for GBP.
  • Australia, China, HK and Taiwan holidays led to a fairly subdued Asian session with GBP/USD trade restricted through the main part of the session between $1.4104/19.
  • Asian traders highlighted a report in the FT, Make UK providing an upbeat outlook for UK manufacturing, which provided some added lift for GBP, despite strong expectations that the Jun21 full lifting of COVID restrictions likely to be put back by 4 weeks.
  • Support $1.4100/1.4090 ahead of $1.4074 then $1.4063.
  • Resistance $1.4130, $1.4140/65
  • A light UK data calendar Monday. BOE Bailey speaks at 1300GMT.
  • Tuesday UK Employment Report, Wednesday CPI.
  • Main focus on Wednesday's US FOMC/Powell press conference.
  • MNI Techs: GBPUSD conditions are unchanged and the pair is still trading in a range below key resistance at 1.4248, Jun 1 high. Trend conditions remain bullish. The probe on Jun 1 of former resistance at 1.4237, Feb 24 high reinforces a bullish theme however a clear break is required to confirm a resumption of the trend. This would open 1.4315, April 18 2018 high. Key support is seen at the 50-day EMA, at 1.4037 and 1.4006, May 13 low.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com

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