GBP/USD extends bounce above 1.3750 amid renewed US dollar weakness

GBP/USD trades well bid above 1.3750, extending the overnight recovery from near the 1.3725 region, as the US dollar resumes the corrective decline amid the upbeat market mood.

Expectations that the Fed Chair Jerome Powell could also reiterate the dovish stance on the monetary policy, as highlighted by the central bank’s March meeting’s minutes, boosted the market sentiment. The minutes revealed that the interest rates will remain lower for longer as the economic recovery is far from complete, despite the country’s strengthening labor market.

On the GBP side of the equation, the buyers are back after the two-day profit-taking slide, as the underlying tone remains upbeat amid a relative success in the UK’s covid vaccination campaign. The Kingdom rolled out Moderna Inc.’s vaccines from Wednesday, which is likely to speed up the inoculation drive across the country, as it opens up from the lockdown restrictions.

Meanwhile, in anticipation of Powell’s speech, the major could continue to derive trading impulse from the dollar trades and the broader market sentiment.

GBP/USD: Technical levels   

Any recovery attempts in the major are likely to remain shallow and could likely face a strong hurdle at the bearish 21-DMA at 1.3831. However, given that the Relative Strength Index (RSI) continues to hold below the central line, the downside appears more compelling for GBP/USD. Therefore, a test of the 100-DMA support (1.3682) remains in the offing, below which the March 25 low of 1.3670 could offer additional protection to the bulls.

GBP/USD: Additional levels