GBP/USD: Beginning of the Biden era to trigger a fresh rally

GBP/USD has hit the highest since 2018 but retreated from the highs. Biden's first moves as president and UK covid updates may trigger the next rally, Yohay Elam, an Analyst at FXStreet, reports.

Key quotes

“The pound has been supported for long days by Britain's rapid vaccination campaign, which has reached nearly 7% of the population, ahead of the US and well beyond European countries. Another reason for optimism is that Britain's coronavirus cases continue falling from their highs.”

“Biden's inaugural speech and first hours in office may be critical. If he pushes for a faster vaccination campaign and offers other growth-friendly policies, the dollar could continue lower. Conversely, any significant environmental curbs could weigh on sentiment.” 

“Democrats not only take over the White House on Wednesday but also the Senate, with the swearing-in of the winners in Georgia, Raphael Warnock, and Jon Ossof. Comments from moderate Republicans and Democrats – critical to passing legislation – may also rock markets. Support for the relief package would weigh on the dollar.”

“If the break above 1.3711 is confirmed, the next hurdles are 1.3730, 1.3810 and 1.40 – all dating back to 2018. Support awaits at 1.3680, a temporary peak in early January. It is followed by 1.3610, a separator of ranges.”