GBP/USD: Sterling is poorly position to seize any Fed-fueled rise
|GBP/USD has advanced after the Fed remained dovish. Break above 1.40 in sight? Political uncertainty in Northern Ireland, PM Johnson's scandals and US GDP are eyed, Yohay Elam, an Analyst at FXStreet reports.
See: GBP/USD set to rally past the March high at 1.4018 – Commerzbank
Fundamentals show sterling gains have their limits
“The Federal Reserve stressed it is not about to taper down its bond buys anytime soon. More dollar printing means a weaker value for the greenback.”
“Thursday's first release of Gross Domestic Product figures for the first quarter are set to rock markets. If Monday's Durable Goods Orders statistics for March are a guide, the data may fall short of estimates – an annualized 6.5% expansion – and could further weigh on the greenback. However, nothing is certain.”
“Britain's successful vaccination campaign is already priced into sterling while new issues are still weighing on the currency. First, Prime Minister Boris Johnson remains under pressure after reportedly asking Conservative Party donors to pay for the renovation of his Downing Street residence. Brexit also refuses to go away. The EU and the UK are still stuck in negotiations for implementing what has been agreed upon. Resolving issues related to the services sector has a long way to go as well.”
“Resistance awaits at 1.3980, which is the fresh swing high. It is followed by 1.4010, April's peak. Support is at 1.3930, which held GBP/USD back earlier this week. It is followed by 1.3880 and 1.3860.”
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