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GBP/USD Meeting Headwinds at $1.3900

GBP
MNI (London)
  • Rejection from last Wednesday's high of $1.4001 extended to $1.3871 Friday.
  • Volatile opening in Asia as sterling picked up demand interest in reaction to the appointment of Sajid Javid as the new Minister for Health (following resignation of Matt Hancock). Javid will update MP's today on the lifting lockdown measures, he is known to favour opening the economy though decision for an earlier opening (to Jul05) will be data dependent(infections climbing but hospitalisations down, with death toll remaining low due to vaccination rollout.
  • However, sterling struggled to hold the early gains(high $1.3915), eased to $1.3876 but managed to claw its way back to $1.3900 into Europe.
  • EUR/GBP closed Friday above its key 10-dma (current Gbp0.8571) which will place a bearish feel on GBP from this pairing whilst it holds above.
  • Support seen into $1.3870, a break to expose a deeper move toward $1.3838(76.4% $1.3787-1.4001). Resistance $1.3945/55 ahead of $1.3975 and recent highs at $1.3987/1.4001.
  • BOE Haldane (hawk) speaks at 1200GMT.
  • MNI Techs: GBPUSD remains vulnerable. This follows recent weakness that resulted in the break of short-term support levels at the 50-day EMA and 1.4006, May 13 low. The pair has also traded through the 100-DMA, reinforcing current bearish conditions. Scope is seen for an extension lower towards 1.3717, Apr 14 low. On the upside, initial firm resistance is seen at 1.4008, the 50-day EMA. The bear trigger is 1.3787, Jun 21 low.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange BulletsHomepage

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