GBP/USD climbs to fresh session tops, around 1.3800 mark amid weaker USD


  • Sustained USD selling allowed GBP/USD to gain traction for the fourth consecutive session.
  • Concerns about the AstraZeneca COVID-19 vaccine might cap gains for the British pound.
  • Investors now look forward to key US macro releases for some meaningful trading impetus.

The USD witnessed some fresh selling during the early European session and pushed the GBP/USD pair to the 1.3800 neighbourhood in the last hour.

Following the previous day's pullback from one-week tops, the pair regained positive traction on Thursday and might now be looking to build on this week's bounce from 100-day SMA support. This marked the fourth consecutive day of a positive move and was exclusively sponsored by sustained selling around the US dollar.

In fact, the USD Index dropped to near one-month lows amid a fresh leg down in the US Treasury bond yields. Tuesday's US CPI report reinforced the Fed's view that higher inflation will be transitory and dampened prospects for an early lift-off. This comes on the back of repeated assurances from Fed officials that rates will stay low.

The Fed Chair Jerome Powell reiterated on Wednesday that the US central bank will reduce its monthly bond purchased before it commits to an interest rate increase, which is unlikely before the end of 2022. This, in turn, dragged the yield on the benchmark 10-year US government bond further away from a 14-month peak of 1.776% touched in March.

That said, concerns about a link between the AstraZeneca COVID-19 vaccine and a rare blood clot might hold traders from placing aggressive bullish bets around the British pound. Given that the UK vaccination program relies heavily on the AstraZeneca shot, a temporary ban for the below 30 age group could delay the government's plan to reopen the economy.

This makes it prudent to wait for a sustained strength beyond the 1.3800 round-figure mark before positioning for any further appreciating move for the GBP/USD pair. Investors might also prefer to move on the sidelines and wait for a fresh catalyst from Thursday's release of the BoE's Credit Conditions Survey/important US macro data.

The US economic docket highlights the releases of monthly Retail Sales figures, Philly Fed Manufacturing Index and the usual Initial Weekly Jobless Claims. This, along with the US bond yields will influence the USD price dynamics and allow traders to grab some short-term opportunities around the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3793
Today Daily Change 0.0015
Today Daily Change % 0.11
Today daily open 1.3778
 
Trends
Daily SMA20 1.3787
Daily SMA50 1.386
Daily SMA100 1.3698
Daily SMA200 1.3352
 
Levels
Previous Daily High 1.3809
Previous Daily Low 1.3749
Previous Weekly High 1.3919
Previous Weekly Low 1.367
Previous Monthly High 1.4017
Previous Monthly Low 1.3671
Daily Fibonacci 38.2% 1.3786
Daily Fibonacci 61.8% 1.3772
Daily Pivot Point S1 1.3748
Daily Pivot Point S2 1.3719
Daily Pivot Point S3 1.3689
Daily Pivot Point R1 1.3808
Daily Pivot Point R2 1.3838
Daily Pivot Point R3 1.3867

 

 

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