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GBP Recovery Continues into Europe

GBP
MNI (London)
  • GBP/USD saw a sharp drop to $1.3717 in early Europe Friday in what looked to be action heading into the 0800BST fix with recovery thereafter continuing to $1.3842 ahead of Friday's close (close $1.3839).
  • Early risk aversion in Asia, some linking this to the sharp pullback in Bitcoin linked to reports US Treasury may crack down on money laundering through digital assets, saw GBP/USD ease to $1.3810 before bouncing to $1.3857 ahead of Europe.
  • This recovery seen driven by EUR/GBP as the cross extended its corrective pullback away from Friday's high of Gbp0.8719 to Gbp0.8630, the rate now back below its 10-dma (current Gbp0.8661) which supports a short term bullish outlook for GBP.
  • GBP/USD support $1.3810/00, $1.3780, $1.3760/50. Resistance $1.3860/67(76.4% 1.3919-1.3669/50-dma), a break exposes $1.3877/86(61.8% 1.4005-1.3669/38.2% 1.4237-1.3669) with the Apr06 high at $1.3919 moving into view.
  • Light event calendar in the UK Monday. Focus this week on Unemployment Tuesday, CPI Wednesday, Retail Sales and Flash PMI set Friday.
  • MNI Techs: A key short-term resistance at 1.3919, Apr 6 high remains intact. A break would strengthen a short-term bullish theme and also signal scope for gains towards 1.3997, a former bull channel base, drawn off the Nov 2, 2020 low. The bear trigger is unchanged at the 1.3670 level. A clean breach would resume the recent downtrend.
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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