- GBP / USD was helped by the weakness of the dollar.
- Brexit problems and the emergence of COVID-19 cases, negative factors for the pound.
- Fall in Treasury yields limits the dollar.
GBP / USD gained momentum and jumped higher, having been trading for hours around 1.3730. The price climbed to 1.3800, the highest level in a week. It remains near the maximum, with the bullish tone.
GBP / USD bounce spreads
After the modest pullback on Friday, GBP / USD resumed its recovery from last week’s bottom. The new rally was sponsored by broad dollar weakness. The problems due to Brexit and the cases of COVID-19 are not affected by the British pound, which in the last hours was also favored by the better mood in the equity markets.
The continued spread of COVID-19 across the United States fueled fears about the renewed restrictions and acted as a headwind for the dollar. Aside from this, a drop in US Treasury yields was seen as another factor undermining the greenback.
The bidding tone surrounding GBP / USD could be further attributed to some strength from the EUR / GBP slide. The combination of supporting factors, to a greater extent, helped offset growing concerns about stalemate in negotiations between the UK and the European Union on the Northern Ireland Protocol to the Brexit deal.
A confirmation of the pound above 1.3800 is necessary for it to enable an extension of the bullish run. Now, 1.3775 looms as the first support followed by 1.3735.
Technical levels
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