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GBP's Recent Shine Begins to Tarnish

GBP
MNI (London)
  • GBP/USD extended its corrective pullback to $1.3831 in early NY trade Friday, as the USD traded with a generally firmer tone. However, rate was able to recover to $1.3886 in post fix trade before closing the week at $1.3870.
  • The replacement of the Turkish central bank governor caused a ripple through EM, provided an early boost for the USD in Asia which acted to press GBP/USD down to $1.3818, with the COVID vaccine spat between the UK and EU also weighing.
  • As EM markets settled, reports of dip buyers in TRY, allowed rate GBP/USD to edge back to $1.3862, trading around $1.3850 into Europe.
  • EUR/GBP closed above its key 10-dma Friday which negates the recent bearish tone in the cross and removes GBP buoyancy from this pair (current 10-dma Gbp0.8571).
  • Despite the vaccine supply threats the UK remains on target to provide the vulnerable over 50's group with a second jab, which should keep the lockdown easing time table on track.
  • Support $1.3818, stronger between $1.3810/00(see MNI Techs below), a break to expose $1.3779/76.
  • Resistance $1.3868, $1.3886/90, a break of $1.3900 to expose the resistance area between $1.3930/60.
  • A light event calendar in the UK Monday, focus Fed Powell at 1300GMT.
  • UK Employment data Mar23. UK CPI and flash PMI's Wednesday.
  • MNI Techs: GBPUSD remains below resistance at 1.4005, Mar 12 high and at the lower end of its recent range. Attention is on support at 1.3779, Mar 5 low ahead of a key bull channel support that intersects at 1.3806. The channel is drawn off the Nov 2, 2020 low and a clear break of both support levels would represent an important short-term reversal. This would open the 1.3700 handle and below. For bulls, a break of 1.4005 is needed to reinstate a bullish theme.
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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