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GBP Retains Buoyant Feel

GBP
MNI (London)
  • Release of softer than forecast US CPI, and a US 10-yr note auction that didn't produce any nasty surprises, acted to improve risk outlook Wednesday which took GBP/USD to an extended recovery high of $1.3938 into the close.
  • GBP/USD eased off to $1.3919 in early Asia before rate tracked EUR/USD's push higher (driven in turn by EUR/JPY demand), edged rate up to $1.3941.
  • Pullback to $1.3929 before a bounce again failed at $1.3941, before it eased to $1.3925 ahead of the European open.
  • Risk outlook remains positive, following the passage of the Biden stimulus package, expected to be signed into law Friday, with US officials to meet Chinese counterparts adding to the tone.
  • Light event calendar for the UK Thursday. Focus on ECB announcements/press conference and US Weekly Jobless Claims.
  • US 30-yr bond auction at 1800GMT also in focus. 3-yr and 10-yr auctions this week have countered last week's poor 7-yr auction, allowing US yields to ease.
  • Support $1.3919, $1.3900 ahead of $1.3880 and $1.3860/40. Resistance $1.3960/75 ahead of $1.4017(mar04 high).
  • MNI Techs: Cable is slightly firmer as the pair corrects recent weakness. However, outlook remains bearish. Price has recently cleared a number of near-term support levels. Focus is on $1.3774 next, the 50-day EMA. Clearance of this average would leave the key bull channel support at $1.3740 exposed. 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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