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GBP on the Defensive in Early Europe

GBP
MNI (London)
  • GBP's Easter gains quickly pared as Europe returned Tuesday with the recovery in EUR seen as a major driving force.
  • EUR/GBP's recovery off Monday's YTD low of Gbp0.8472 saw it move back above its key 10-dma (Gbp0.8541 Apr06) to Gbp0.8592, the cross holding those gains through Asia.
  • This move in the cross took GBP/USD off its early Europe high of $1.3919(move began through the 0700GMT fix) to an initial low of $1.3818 in early NY, recovered to $1.3866 ahead of the 1600BST London fix before it extended lows to $1.3802. Rate edged to $1.3834, closing the day at $1.3824.
  • Rate found support at $1.3820 in early Tokyo but recovery efforts were capped at $1.3840. Corrective pullbacks continued to meet support at that $1.3820 into the Europe open.
  • UK COVID vaccine roll out and optimistic growth recovery hopes remain for the UK economy and should support GBP going forward. Some talk of real money closing EUR funded positions cited for the recovery in EUR.
  • UK reserve data due at 0600GMT, more focus on UK final Svcs PMI to be released at 0830GMT, flash 56.8. US Trade at1230GMT.
  • Support $1.3820, $1.3802/1.3795 ahead of $1.3765, $1.3729. Resistance $1.3840, $1.3866, stronger at $1.3919/23.
  • MNI Techs: GBPUSD started the week on a firmer note as the pair extended its recovery from the Mar 25 low. Price did breach a short-term trendline resistance drawn off the Feb 25 low but has stalled at resistance defined by a bull channel base from the Nov 2, 2020 low. The bull channel base was cleared Mar 23 and intersects at 1.3921 today. A clear break higher would open 1.4017, Mar 4 high. Initial support lies at 1.3802.
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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