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General USD Strength Counters GBP Buoyancy

GBP
MNI (London)
  • GBP/USD traded with a buoyant tone during Thursday's European morning session, and ahead of the BOE MPC rate announcement.
  • This buoyancy allowed rate to cushion the effects of a spike higher in UST yields but eventually eased lower through the BOE announcement to a low of $1.3898 in a move seen USD led.
  • This despite the BOE (which kept policy rate and purchases unchanged) was seen with a slight hawkish lean toward its next meeting as no concern regarding rising yields.
  • Rate recovered to $1.1952 at the 1600GMT fix before closing around $1.3930.
  • Early consolidation in Asia around $1.3930 before it was pressed down to $1.3893 but buyers quickly moved in as UST yields drifted lower, taking it back to $1.3929 into Europe.
  • EUR/GBP continues to hug its key 10-dma leaving GBP/USD to track EUR/USD moves.
  • UK borrowing data begins the session at 0700GMT in another wise light data calendar.
  • Support seen into $1.3880 ahead of $1.3855/50 and $1.3820. Resistance $1.3929/34 ahead of $1.3950, with the $1.4000/20 area holding the key to further upside gains.
  • MNI Techs: GBPUSD remains below resistance at 1.4005, Mar 12 high. Attention is still on support at 1.3779, Mar 5 low ahead of a key bull channel support that intersects at 1.3797. 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 1.3600 handle and below. For bulls, a break of 1.4005 is needed to signal scope for stronger gains.
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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