GBP/USD consolidates in a range below mid-1.3800s


  • GBP/USD struggled for a firm direction on Monday and remained confined in a range.
  • A broad-based USD strength was seen as a key factor capping the upside for the pair.

The GBP/USD pair extended its sideways consolidative price action through the mid-European session and remained confined in a range below mid-1.3800s.

The pair showed some resilience below the 1.3800 mark on Friday, albeit, so far, has struggled to register any meaningful recovery from near one-month lows. A broad-based US dollar strength was seen as a key factor that held bulls from placing bets and capped the upside for the GBP/USD pair.

Friday's stunning US jobs report for February reinforced the narrative of a strong sequential US economic recovery from the pandemic and continued lending some support to the USD. Apart from this, a fresh leg up in the US Treasury bond yields provided an additional boost to the greenback.

The US Senate on Saturday passed a much-awaited $1.9 trillion stimulus package and sparked another sell-off in the US fixed income market. This, along with expectations for an uptick in the US inflation, pushed the yields on the benchmark 10-year US bond back closer to 1.60%, or over one-year tops.

Meanwhile, the bond market rout raised fears of distressed selling in other asset classes. Adding to this, reports of attacks on Saudi Arabian oil facilities led to a cautious mood around the equity markets. This, in turn, extended some additional support to the safe-haven greenback.

On the other hand, the British pound found some support from the easing of coronavirus-induced lockdown measures in England. As the first step of a four-step plan, all schools reopened from March 8 and recreation in outdoor public spaces will be allowed between two people.

Meanwhile, the GBP/USD pair had a rather muted reaction to comments by the Bank of England Governor, Andrew Bailey. Speaking at a webinar this Monday, Bailey said that the economic outlook is positive and that we will see a rise in inflation in the short term.

There isn’t any major market-moving economic data due for release on Monday, either from the UK or the US, leaving the GBP/USD pair at the mercy of the USD price dynamics. That said, the US bond yields and the broader market risk sentiment will influence the USD and produce some short-term trading opportunities.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3838
Today Daily Change -0.0009
Today Daily Change % -0.06
Today daily open 1.3847
 
Trends
Daily SMA20 1.3927
Daily SMA50 1.3753
Daily SMA100 1.3503
Daily SMA200 1.317
 
Levels
Previous Daily High 1.3907
Previous Daily Low 1.3779
Previous Weekly High 1.4017
Previous Weekly Low 1.3779
Previous Monthly High 1.4243
Previous Monthly Low 1.3566
Daily Fibonacci 38.2% 1.3828
Daily Fibonacci 61.8% 1.3858
Daily Pivot Point S1 1.3781
Daily Pivot Point S2 1.3716
Daily Pivot Point S3 1.3653
Daily Pivot Point R1 1.3909
Daily Pivot Point R2 1.3972
Daily Pivot Point R3 1.4038

 

 

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