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GBP Tentative Recovery

MNI (London)
  • GBP/USD was pressed down to $1.3773 in early Europe Wednesday only to bounce back through the 0800BST fix to $1.3838. However, recovery quickly faded and rate drifted off through early NY, picking up momentum ahead of the 1600BST fix, touching $1.3729. Recovery through the fix stalled at $1.3794 before rate eased to a low of $1.3725, closed the day at $1.3739.
  • Rate began to pick up fresh demand in early Tokyo, pushed up to $1.3769 into Europe.
  • Recovery aided as EUR/GBP continues to meet resistance around the topside of its 1.0% 10-dma envelope, currently at Gbp0.8635.
  • Concerns over the safety of the AstraZeneca vaccine (rare blood clotting) suggested to be pressing against the GBP. Real money covering of EUR funded positions suggested for the drive higher in EUR/GBP which in turn seen weighing on the GBP.
  • Support $1.3729/25(76.4% $1.3670-1.3919, still seen relevant/Apr07 low), a break to expose recent lows at $1.3706(Mar30) and $1.3670(Mar25). Resistance $1.3794/1.3800, $1.3840/55, $1.3919/23.
  • BOE Haldane speaks at 1500GMT.
  • MNI Techs: GBPUSD Tuesday found resistance just above the 1.3900 handle and yesterday extended the pullback from the 1.1919 high. The failure at recent highs highlights the importance of resistance relating to the former bull channel drawn off the Nov 2, 2020 low - the bull channel base was cleared Mar 23. The base intersects at 1.3930 and a strong break higher is required to strengthen a bullish argument. Key support and bear trigger is 1.3670.
MNI London Bureau | +44 203-586-2231 |
MNI London Bureau | +44 203-586-2231 |