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Threat to June 21 COVID Restrictions Lift Dampens GBP Enthusiasm

GBP
MNI (London)
  • GBP/USD recovered off Monday's pullback low of $1.4111(76.4% $1.4083-1.4200) but failed to attain Friday's post NFP react rally high of $1.4200, the move up fading at $1.4190 before closing the day at $1.4179.
  • GBP/USD lagged behind EUR/USD's stronger recovery which allowed EUR/GBP to recover off its low of Gbp0.8578 back to hold around its key 10-dma, currently at Gbp0.8604.
  • GBP/USD continued to ease through Asia, touched $1.4153 ahead of Europe.
  • Some concerns that the hoped for Jun21 full opening from COVID lockdown could be delayed due to virus spread seen weighing. Times suggested that the UK might have to delay lifting Covid-19 restrictions by a fortnight, following a "downbeat" briefing on the local Covid-19 situation from chief medical officers. Bubbling trade tensions between London and Brussels provided another source of worry.
  • Support seen into $1.4150 ahead of $1.4130/25 with stronger support noted into $1.4111/06. Resistance $1.4190/1.4200 ahead of $1.4209(76.4% $1.4248-1.4083), a break here to expose the YTD at $1.4248(Jun01).
  • A light data calendar for the UK Tuesday, focus on Germany ZEW.
  • BOE Haldane (hawk) 1300GMT(speaks on inequality at Glasgow Uni)
  • MNI Techs: GBPUSD is in a range and remains below last week's 1.4248 high from Jun 1. Trend conditions are bullish. The probe last week of former resistance at 1.4237, Feb 24 high reinforces a broader bullish theme however a clear break is required to confirm a resumption of the uptrend. This would open 1.4315 next, April 18, 2018 high. On the downside, initial firm support is at 1.4083, the Jun 4 low. A break would expose the 50-day EMA at 1.4019.
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
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