GBP/USD: Bulls are back in the saddle to attack 1.4200

GBP/USD has bounced off the lows as Powell's dovish message weighs on the dollar. An attack on 1.42 looks imminent, according to FXStreet’s Analyst Yohay Elam.

Key quotes

“Markets seemed to have been waiting for a further reassuring from Jerome Powell, Chairman of the Federal Reserve, before making another convincing move higher. The upbeat mood is adverse for the dollar, despite higher bond yields.” 

“The FDA advanced Johnson and Johnson's single-shot vaccine ahead of final approval in the next few days. That also serves as a reminder that Britain's vaccination campaign continues at full speed after jabbing a quarter of its population.” 

“A busy US economic calendar awaits traders, with elevated expectations for all figures – from a revision of fourth-quarter growth figures, through Durable Goods Orders for January and finally weekly jobless claims. When the bar is high, so is the probability of disappointment. A set of downbeat economic figures may provide cable bulls fuel for the next rally.”

“The Relative Strength Index on the 4-hour chart has dropped below 70, exiting overbought conditions and opening the door to further gains. Momentum remains to the upside and the cable continues trading above the 50, 100 and 200 Simple Moving Averages.”

“Resistance awaits at 1.42, the round number, and then by the 2021 peak of 1.4240. Support awaits at the daily low of 1.4120, followed by 1.4080 and 1.4050, both stepping stones on the way up.”