GBP/USD Forecast: Yellen may give sterling a shot in the arm, critical resistance eyed

GBP/USD has been edging higher amid an improved market mood.
The UK's ramped-up vaccination campaign is boosting sterling.
Tuesday's four-hour chart is painting a mixed picture.

Yohay Elam FXStreet

Is the big break above 1.37 coming? That heavily depends on Janet Yellen, who is making a comeback as Treasury Secretary nominee after her sting as Chairman of the Federal Reserve. In her prepared remarks to Congress, Yellen stated that "now is the time to spend" – echoing President-elect Joe Biden's words.

Will the new administration raise taxes or increase the debt? If Yellen suggests closing loopholes or other measures, stocks could fall and the dollar would rise. However, the former Chair of the Federal Reserve may opt for more debt – which would receive funding from Jerome Powell, her successor at the Fed. She will probably stray away from suggestion monetary financing – Yellen is experienced at such testimonies – but markets may have their interpretations.

There are additional topics to consider in her all-important public appearance.

See Yellen Testimony Cheat Sheet: Three factors set to rock stocks and the dollar

In the meantime, coronavirus continues raging on both sides of the Atlantic, with some tentative signs of peaking. More importantly, the UK has been extending its vaccination campaign and is inoculated nearly 7% of its population. The rate is roughly half of that in America. Britain's lead in vaccination gives it an edge.

Brexit refuses to die as the EU and the UK continue deliberating the future of services, and parliament discusses the bill. However, no market-moving developments are likely.

Overall,. Yellen and UK's vaccines are high on the agenda.

GBP/USD Technical Analysis

Pound/dollar is making tentative signs of breaking above 1.3615, which provided support last week and serves as a separator of ranges. On its way up, cable broke above the 50 and 100 Simple Moving Averages. a bullish sign.

Above 1.3615, the next level to watch is 1.3670, a peak in early 2021, followed by the yearly high of 1.3705.

Support awaits at 1.3520, the weekly low, and then by 1.3450 and 1.3430, stepping stones on the way up.

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

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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