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GBP / USD extends bounce above 1.3750

  • The USD weakens as appetite for higher perceived risk assets like the British pound improves.
  • Markets await Fed Chairman Jerome Powell’s speech after pessimistic FOMC minutes.
  • Covid vaccination progress in the UK is holding the pound sterling.

The GBP / USD is trading above 1.3750, extending the previous day’s recovery from near the 1.3725 region, as the US dollar resumed its corrective decline amid market optimism.

The expectations that the Fed chairman, Jerome Powell, could also reiterate the pessimistic stance on monetary policy, as highlighted in the minutes of the central bank’s March meeting, boosted market confidence. The minutes revealed that interest rates will remain low for longer as the economic recovery is far from complete, despite the strengthening of the country’s labor market.

On the sterling side, buyers turn back after two-day dip due to profit-taking as the underlying tone remains bullish. amid relative success in UK covid vaccination campaign. The country launched the Moderna Inc. vaccines starting Wednesday, which will likely accelerate the inoculation campaign across the country, as it reopens from lockdown restrictions.

Meanwhile, ahead of Powell’s speech, the pair could continue to gain momentum due to a weak dollar and general market sentiment.

GBP / USD technical levels

Any recovery attempt in the pair is likely to remain superficial and is likely to face a stiff hurdle at the bearishly sloping 21-day SMA at 1.3831. However, as the RSI continues to stay below the center line, the decline looks more convincing for GBP / USD. Hence, a test of the 100-day SMA support at 1.368) remains on the table, below which the March 25 low of 1.3670 could offer additional support to the bulls.

GBP / USD additional levels

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