- GBP / USD rebounded from support at the weekly lows of 1.3670 and is currently recovering towards 1.3750.
- The fact that the UK and the EU have defused vaccine tensions seems to have helped.
Even though the US dollar advanced against most of its G10 counterparts on Thursday, the GBP/USD it is experiencing a fairly robust recovery, with GBP being the best performing currency in the G10 on the day. The pair recovered from support in the form of weekly lows around the 1.3675 area and is currently recovering towards 1.3750. GBP / USD bulls are likely to seek resistance in the form of March 5 lows modestly below 1.3780, ahead of a test of the 50-day moving average whereby the pair sank earlier in the week at 1.3827. .
Performance of the day
It’s not very clear why the GBP is underperforming this Thursday, but the fact that it looks like the UK and the EU are going to work on something on vaccines seems to have helped; For reference, the EU and the UK issued a joint statement on Wednesday saying they were jointly studying how to increase vaccine production capacity and create a win-win situation. As a result, some might hope that the EU does not now resort to blocking vaccine exports to the UK, something that would likely have been taken as a negative GBP.
On the other hand, technical selling on the EUR / GBP cross also appears to be giving the GBP a broader boost; For reference, the EUR / GBP, which was trading at two-week highs around 0.8640 at the start of Thursday’s European session, has now fallen to 0.8570, where it now resides only about 30 pips above recent multi-month lows. headdresses.
Clearly, the modest rally in the EUR / GBP between Monday and early Thursday (where it rose modestly below 0.8600 to the aforementioned two-week highs) has been seen by sterling bulls as an opportunity to sell. Indeed, the economic outlook continues to support a further decline, with the EU reverting to lockdown to contain a third wave (France just put three additional regions under strict lockdown) while Covid-19 cases and death rates continue to fall. in the UK: expectations are for a much faster economic recovery in the UK than in the EU in 2021 and thus the disparity is reflected in the difference in tone between officials at the Bank of England and the ECB, another factor weighing on EUR / GBP (and apparently helping GBP / USD on Thursday).
Technical levels
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