• GBP/USD has been on the back foot as markets look depressed. 
  • Britain's slow exit from the lockdown is weighing on sterling, but the mood may improve. 
  • Thursday's four-hour chart is painting a mixed picture. 

No school until March 8 – that is what children have learned from Prime Minister Boris Johnson, who laid out a lengthy exit strategy from the lockdown. A detailed plan will be out only on the week of February 22. Investors were expecting an earlier exit from the measures and are sending the pound lower.

However, Johnson may have learned from past promises and is now erring on the side of caution. In December, he rejected calls for a lockdown and refused to "cancel Christmas" only to back down several days later. Moreover, the UK has been vaccinating its population at a rapid pace – a stark contrast with the continent. The EU is suffering a delay of doses from Pfizer and also from AstraZeneca. The latter clash also involved high emotions, as AZN is a British firm.

GBP/USD has suffered from dollar strength related to safe-haven flows. Concerns about market exuberance – namely related to GameStop – have pushed broader shares lower and the safe-haven greenback higher. The risk averse movements came despite a fresh commitment by the Federal Reserve to continue supporting the economy. 

Fed Quick Analysis: Powell refuses to stop the stock party, dollar may suffer some pressure

The focus is now on fresh data. US Gross Domestic Product statistics for the fourth quarter are set to show slower growth, while jobless claims are projected to remain elevated. Bad news can turn into good news for markets – as it implies even more support from the central bank. In turn, that could weigh on the dollar and boost sterling. 

President Joe Biden continues deliberating his fiscal stimulus plans with lawmakers. The topic is somewhat on the back burner but may return to the forefront. 

All in all, cable may emerge from its current fall and advance once the dust settles. 

GBP/USD Technical Analysis

Pound/dollar continues trading in an uptrend since late December and has bounced off the 100 Simple Moving Average on the four-hour chart– a bullish sign. On the other hand, momentum remains to the downside. Bulls remain in the lead despite the decline.

Resistance awaits at 1.3690, the daily high, followed by 1.3730, a temporary cap on the way to the 2021 peak at 1.3752. 

Support awaits at 1.3620, where the uptrend hits the price, followed by 1.3520, a cushion on the way up. The next line to watch is 1.3450. 

GBP/USD Price Forecast 2021: Cable braces for calendar comeback amid three exits

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD rises toward 0.9700 following earlier slump

EUR/USD rises toward 0.9700 following earlier slump

EUR/USD has managed to erase its daily losses and turned flat on the day slightly below 0.9700 in the European morning. Disappointing IFO sentiment data from Germany had little to no impact on the shared currency as investors keep a close eye on central bank speakers.

EUR/USD News

GBP/USD rebounds from all-time lows, eyes on BoE

GBP/USD rebounds from all-time lows, eyes on BoE

GBP/USD has recovered toward 1.0800 from the all-time low it touched below 1.0400 earlier in the day. GBP bears move to sidelines amid market speculations that the Bank of England could consider an emergency rate hike to stop the currency's depreciation.

GBP/USD News

Gold gains traction, trades above $1,640 Premium

Gold gains traction, trades above $1,640

After having dropped to its weakest level in over two years below $1,630 during the Asian trading hours, gold staged a rebound and advanced beyond $1,640. The benchmark 10-year US T-bond yield is up 2% on the day, not allowing XAU/USD to gather further bullish momentum.

Gold News

Cardano price could trap impatient investors before triggering an explosive move to $0.505

Cardano price could trap impatient investors before triggering an explosive move to $0.505

Cardano price shows a consolidation below a stable support level and has yet to reveal a directional bias. The ongoing range tightening will likely resolve as the US markets head to a fresh start this week.

Read more

Week Ahead: Euro eyes Italian elections and flash CPI, dollar may take a backseat

Week Ahead: Euro eyes Italian elections and flash CPI, dollar may take a backseat

With the Fed meeting out of the way, a quieter week is on the horizon, barring of course any flare up of tensions between Russia and Ukraine. Either way, the spotlight will probably fall on the euro as far-right parties are expected to gain ground in Italy’s parliamentary election on Sunday.

Read more

Majors

Cryptocurrencies

Signatures