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USD Correction and UK Lockdown Weigh on GBP/USD

GBP
MNI (London)
  • USD continued to recoup early 2021 losses in Asia, GBP/USD extended its corrective pullback away from its Jan04 high of $1.3704(YTD high) to $1.3492(YTD low).
  • However, demand seen emerging into the dip with rate edging back to $1.3514 into Europe.
  • GBP enthusiasm into the new year, following the Brexit trade agreement, began to fade as attention was switched to COVID spread in the UK which in turn prompted the Govt to impose lockdown restrictions with its effect on growth. Vaccine roll out seen as a counter but effects of this will take some weeks/months.
  • Growth effects highlight Friday's monthly GDP release(start of a double-dip recession?).
  • Market seen long GBP but seen comfortable while rate holds above $1.3400.
  • Support $1.3492, $1.3480, $1.3455/45, $1.3430. Resistance $1.3540/50, $1.3577/80, $1.3600, $1.3636.
  • MNI Techs: GBPUSD is weaker this morning and still trading below recent highs. The pair has breached the 20-day EMA and this signals scope for a deeper short-term pullback. Note, a move lower is likely a correction with underlying bullish trend conditions still intact. Attention turns to support at 1.3430, Dec 28 low and 1.3388, the 50-day EMA. On the upside, price needs to trade above Friday's 1.3636 high to refocus attention on last week's high of 1.3704.
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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