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GBP/USD Continues to Struggle Above $1.3800.

GBP
MNI (London)
  • GBP/USD struggled to hold gains above $1.3800 again in Thursday trade, the rate rejected away from Wednesday's high of $1.3809 in pre NY trade to a low of $1.3762.
  • Early NY took rate back to $1.3807 but again ran into headwinds before rate settled around $1.3780 into the close.
  • Trade tracked EUR/USD performance, this pair being rejected away from its resistance area between $1.1990/1.2000, whilst EUR/GBP was contained within a range of Gbp0.8670/0.8700, though remaining within its key 1.0% 10-dma envelope.
  • Consolidation continued into early Asia before USD/JPY demand emerged in Tokyo which acted to press GBP/USD down to $1.3753. Noted support into $1.3750 (hourly lows Thursday) contained the base and allowed rate to edge back to $1.3768 into Europe.
  • Support $1.3750, a break to open a deeper pullback toward $1.3722(61.8% $1.3669-1.3809) ahead of $1.3700($1.3702 76.4%). Below here to expose recent lows at $1.3670/69.
  • Resistance $1.3788, $1.3809 ahead of $1.3824(61.8% $1.3919-1.3669) and $1.3840/50.
  • Risk appetite remains a key driver, UST yields easier but weekend approaching and possible we see position adjustment, USD short covering?
  • BOE Cunliffe and Woods speak at 0900GMT.
  • MNI Techs: Despite recent gains, the GBPUSD outlook remains bearish. Firm resistance is at 1.3919, Apr 6 high. Note, a former bull channel drawn off the Nov 2, 2020 low also highlights resistance at 1.3987. Clearance of this 1.3919/87 zone is required to strengthen a bullish argument. Attention is on key support at 1.3670, Mar 25 low. A clean break would resume the 1.5 month downtrend and open 1.3641, a Fibonacci retracement. Initial resistance is 1.3840.
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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