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GBP Retains Firm Tone as UK Returns From Easter Break

GBP
MNI (London)
  • Recovery away from the Mar25 low of $1.3670 extended further over the Easter break with GBP/USD pushing up to $1.3913 in a holiday thinned Monday session, with early Asia nudging it on to $1.3916.
  • Improved risk appetite cited for the move, GBP able to take full advantage of a soft USD with investors attracted by the COVID vaccine roll out and ongoing timetable for the lifting of lock down restrictions.
  • USD demand at the Tokyo fix, along with some noting the US reconciliation process which should allow an easier passage for the spending and taxation infrastructure bill, saw GBP/USD ease to $1.3890 before picking up fresh demand ahead of the European open which has taken rate through the earlier high to $1.3918.
  • EUR/GBP remains below its key technical 10-dma (current Gbp0.8531) as well as below Gbp0.8500 which is seen adding to GBP buoyancy.
  • Support $1.3890, $1.3855/40. Resistance $1.3918/23(Int.Day high/76.4% $1.4001-1.3670), a break to open a move toward $1.3835 ahead of $1.3850/60.
  • A light data calendar in the UK Tuesday. Focus on Wednesday's release of final PMI Svcs.
  • MNI Techs: GBPUSD started the week on a firmer note as the pair extended its recovery from the Mar 25 low. Price has breached a short-term trendline resistance drawn off the Feb 25 low and is currently testing resistance defined by a bull channel base from the Nov 2, 2020 low. The bull channel base was cleared Mar 23 and intersects at 1.3911 today. A clear break would open a recovery toward 1.4017, Mar 4 high. Initial support lies at 1.3804, the 50-day EMA.
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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