• GBP/USD has been trading around 1.36 as tensions grow toward US Nonfarm Payrolls.
  • Optimism about vaccine approval and deployment may boost the pound. 
  • Friday's four-hour chart is showing bulls are gaining ground.

A week that has seen the historic storming of the Capitol has also experienced relatively limited movement in GBP/USD – but that may change on Friday. After cable retreated from the highs in response to the UK's harsh lockdown, things may turn in favor of the currency pair. 

Here are three reasons why:

1) British vaccine progress

While hospitals in London are raising the alarm over potentially being overwhelmed later this month, recent infection figures have shown some stability. The new lockdown or the previous one may begin working. Additional data due later in the day may shed more light on the disease's development.

More importantly, Britain is ramping up its efforts to beat the virus. Regulators are set to approve Moderna's vaccine, bringing the total number of immunization schemes deployed in the UK top three. Another shot in the arm comes from concerted efforts by the government to speed up the distribution of jabs across the county.

More Coronavirus: Statistics, herd immunity, vaccine calendar and impact on financial markets and currencies

2) Nonfarm Payrolls

The dollar's rise came from higher yields – a result of expectations for higher debt following a new stimulus driven by the new administration. President-elect Joe Biden won an effective majority in the Senate after the Georgia runoff elections.

While the events were overshadowed by the violent incursion of Capitol Hill by supporters of President Donald Trump, the greenback reacted to higher returns on debt rather than anything else.

Five factors moving the US dollar in 2021 and not necessarily to the downside

What can bring yields down and make the dollar less attractive? Bond-buying by the Federal Reserve and that could happen if economic data deteriorates. The Nonfarm Payrolls report for December is set to show a notable slowdown in hiring – and perhaps a loss of jobs. Any disappointment could prompt action from the Fed, which already expressed its readiness to act. 


3) Technicals are improving

Momentum on the four-hour chart has turned positive for GBP/USD – which has also been able to recapture the 50 Simple Moving Average it had lost on Thursday. While sterling is still not out of the woods, the picture is improving.

Some resistance awaits at 1.3620, the mid-December high, followed by 1.3676, the 2021 high. Further above, the next level to watch is 1.3705, the 2020 peak. 

Support awaits at 1.3630, the daily low, followed by 1.3480, 1.3445, and 1.34. 

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

AUD/USD: Golden cross confirms more upside for aussie bulls, 0.7100 eyed

AUD/USD: Golden cross confirms more upside for aussie bulls, 0.7100 eyed

A bearish Double Distribution day could bring more offers to the asset. A golden cross, represented by 50- and 200-period EMAs advocates the antipodean. Aussie bulls may find a responsive buying action at the lower boundary of the Rising Channel.


EUR/USD skids to near 1.0550 as risk-on impulse fades, Eurozone data eyed

EUR/USD skids to near 1.0550 as risk-on impulse fades, Eurozone data eyed

The EUR/USD pair has witnessed a minor fall after breaching the early Asian session’s consolidation formed in a narrow range of 1.0579-1.0588 as the risk-off impulse rebounded. The asset has slipped to near 1.0550 and is expected to remain uncertain.


Gold bulls recapture 200-DMA, more gains likely? Premium

Gold bulls recapture 200-DMA, more gains likely?

Gold Price is headed for the first weekly gain in five weeks this Friday, despite posting small losses, in the wake of a sharp rebound in the US dollar. The dollar recovers its ground even though risk sentiment remains in a fairly better spot, with the S&P 500 futures up 0.65% on the day. 

Gold News

How to trade the next 20% upswing in Binance Coin price

How to trade the next 20% upswing in Binance Coin price

Binance Coin price is on a recovery rally and shows promise of a further uptrend. Adding credence to this run-up is the price inefficiency that is likely to propel BNB higher. Binance Coin price crashed to $205 on May 13 as the crypto markets crumbled due to the LUNA-UST debacle.

Read more

Tesla regains $700 despite cut from S&P 500 ESG Index

Tesla regains $700 despite cut from S&P 500 ESG Index

Tesla's stock slips as it is kicked out of the S&P 500 ESG index. Elon Musk reacts aggressively, calling it a scam. Growth fears dominated and weighed on the overall market mood, leading to a negative close on major Wall Street indices. 

Read more