GBP/USD bulls await a sustained move beyond 1.3700 mark


  • GBP/USD added to the previous day’s strong gains and edged higher for the second straight day.
  • The GBP remained supported after BoE Governor Bailey downplayed negative rate speculations.
  • Retreating US bond yields, bullish sentiment undermined the greenback and remained supportive.

The GBP/USD pair held on to its modest intraday gains through the first half of the European session, with bulls still awaiting a sustained move beyond the 1.3700 mark.

The pair gained some follow-through traction for the second consecutive session on Wednesday and added to the overnight strong positive move, led by the Bank of England Governor Andrew Bailey's remarks. During his online speech to the Scottish Chambers of Commerce, Bailey downplayed speculations on negative interest rates and provided a strong lift to the British pound.

Bailey said that there are a lot of issues with negative interest rates and that it was too soon to reach any conclusion about the need for future stimulus. Bailey's comments indicated that the BoE is more likely to wait and see how the economy reacts to Brexit and the third lockdown in the UK before deciding on anything.

On the other hand, the ongoing retracement in the US Treasury bond yields kept the US dollar bulls on the defensive and remained supportive of the bid tone surrounding the GBP/USD pair. The recent strong rally in the US bond yields lost some steam in reaction to the strong demand seen at a $38 billion 10-year auction overnight.

Adding to this, the Fed officials reiterated that the monetary policy is going to remain accommodative. The greenback was further pressured by the underlying bullish sentiment in the financial markets, which remained well supported by hopes for a strong global economic recovery in 2021 and additional US fiscal stimulus measures.

There isn't any major market-moving economic data due for release from the UK on Wednesday. Meanwhile, the US economic docket highlights the release of consumer inflation figures. This, along with the US bond yields and the market risk sentiment, will influence the USD price dynamics and provide some impetus to the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3689
Today Daily Change 0.0023
Today Daily Change % 0.17
Today daily open 1.3666
 
Trends
Daily SMA20 1.3549
Daily SMA50 1.3393
Daily SMA100 1.3193
Daily SMA200 1.2896
 
Levels
Previous Daily High 1.3669
Previous Daily Low 1.3502
Previous Weekly High 1.3704
Previous Weekly Low 1.3532
Previous Monthly High 1.3686
Previous Monthly Low 1.3134
Daily Fibonacci 38.2% 1.3605
Daily Fibonacci 61.8% 1.3565
Daily Pivot Point S1 1.3555
Daily Pivot Point S2 1.3445
Daily Pivot Point S3 1.3388
Daily Pivot Point R1 1.3722
Daily Pivot Point R2 1.3779
Daily Pivot Point R3 1.3889

 

 

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