GBP/USD seesaws above 1.4000 amid UK unlock optimism
|- GBP/USD awaits fresh clues near the highest since April 2018, eases from multi-month top off-late.
- UK PM Johnson prepones the vaccinations target, eyes school reopen by early March.
- UK data came in mixed, US figures were sluggish but risk-on mood weighs on the greenback.
- Johnson’s speech, virus updates and US stimulus news will be the key amid a light calendar.
GBP/USD wavers around 1.4015 while extending consolidation from Friday’s multi-month top during the initial Asian session on Monday. The cautious sentiment ahead of UK PM Boris Johnson’s speech on easing of the coronavirus (COVID-19)-led activity restriction seems to weigh on the quote off-late. Even so, hopes of easing lockdown and faster covid vaccinations favor the sterling.
BoJo stays hopeful…
Not only upbeat PMIs for January but the receding covid figures and sustained increase in immunization beyond the 15 million jab target also back the UK Leader to stay hopeful and call back the virus-led lockdown gradually. Although chatters over schools reopen by March 08 are widely talked about, traders will be interested in the reduction of the business time. It should also be noted that the iNnews reporter Hugo Gye recently tweeted, “Every adult in the UK will be offered a Covid-19 vaccine by the end of July, Boris Johnson says. Previous target was September. Target for reaching all over-50s and those with existing medical conditions has been accelerated to 15th April,” which in turn favor optimism for Britain.
On the other hand, a top pandemic advisor to US President Joe Biden Dr. Anthony Fauci warned on Sunday, per CNBC, that Americans should steel themselves against a sense of Covid-19 complacency even as coronavirus infections plummet and some scientists predict that herd immunity is just around the corner. It should also be noted that the US Federal Reserve, in its bi-annual report, cited downside risks to the business.
Even so, hopes of US President Biden’s $1.9 trillion covid relief package and a gradual recovery in the global economy favor the market bulls.
Amid these catalysts, Treasury yields stay strong near the one-year top while equities are also upbeat despite the latest pullback from the record highs.
It’s worth mentioning that the UK Retail Sales for January disappointed cable buyers before the preliminary PMIs for February propelled GBP/USD to a fresh high since April 2018. On the other hand, the US activity numbers were also upbeat but not as strong as the British ones.
Moving on, GBP/USD traders will keep their eyes on UK PM Johnson’s speech for fresh impulse for any further upside past-1.4000. Meanwhile, US stimulus headlines and virus/vaccine updates can entertain the cable traders.
Technical analysis
The upper line of an ascending trend channel from September 10, 2020, currently around 1.4035, guards short-term GBP/USD upside. While the pullback moves eye the 1.4000 threshold, the mid-February top near 1.3950 will question the cable’s any further weakness.
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