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Opens Europe Back Above $1.3600, But $1.3704 Looks a Long Way Off

GBP
MNI (London)
  • Recovery off Monday's pullback low of $1.3542 (off its 2021 posted high of $1.3704) eventually cleared above $1.3600 Tuesday, extending the move yo $1.3642 in post 1600GMT fix trade, settling above $1.3620 into the close.
  • Recovery seen despite the UK moving into a third lockdown, due to COVID spread/pressure on NHS, with general risk outlook pressing back on the USD.
  • High voter turnout in the Georgia Senate election, which was seen boosting Republican hopes, acted to further boost risk attraction and allowed GBP/USD to edge on to $1.3646 before momentum quickly faded. As the session continued the Senate race outlook flip-flopped between Democrat/Republican win which bruised the risk outlook and pressed GBP/USD down to $1.3592.
  • Dip attracted buyers and allowed rate to nudge back to $1.3630 into Europe.
  • Support $1.3592, $1.3580 ahead of $1.3554/42(Jan05-04 lows) and $1.3535, $1.3500.
  • Resistance $1.3646/50, $1.3666(76.4% $1.3704-1.3542) ahead of $1.3704.
  • UK Services PMI due at 0930GMT ahead of afternoon US ADP(in focus ahead of Friday NFP), US Svcs PMI, Factory Orders, Durable Goods and FOMC Meeting Minutes.
  • Georgia Senate result remains key focus in early trade.
  • MNI Techs: GBPUSD is unchanged. The pair failed to hold onto the session highs Monday and closed down on the day. The outlook is bullish though following the recent clearance of key resistance at 1.3624, Dec 17 high. The break reinforces a positive trend structure and opens 1.3712 next, Mar 1, 2018 low. On the downside, firm support lies at 1.3430, Dec 28 low and 1.3304, Dec 22 low. Initial support is at 1.3512, the 20-day EMA.
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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