- GBP/USD failed to preserve/capitalize on its early European session positive move to three-day tops.
- Brexit jitters offset renewed USD selling, optimistic outlook for the UK economy and capped the upside.
The GBP/USD pair faded an early European session spike to three-day tops and quickly retreated below the 1.4100 mark in the last hour.
Following a brief consolidation through the early part of the trading action on Monday, the pair regained traction and build on last week's goodish bounce from the key 1.4000 psychological mark. This marked the second day of a positive move and was sponsored by the emergence of some fresh selling around the US dollar.
The USD was being weighed down by Friday's disappointing US Retail Sales data, which reaffirmed the Fed's dovish view and forced investors to trim their bets for an earlier than anticipated tightening. This, along with the ongoing decline in the US Treasury bond yields, further acted as a headwind for the greenback.
Even a softer tone around the equity markets – amid worries about the continuous surge in new COVID-19 cases across Asia – did little to lend any support to the safe-haven greenback. On the other hand, the British pound was supported by an optimistic economic outlook amid the gradual easing of restrictions in the UK.
In fact, Britain relaxed restrictions on its economy and social contact further, effective this Monday. Among other measures, people will be allowed to hug each other again and pubs and restaurants will be able to serve customers inside. This helped offset worries about the fast-spreading Indian variant of the virus.
That said, uncertainty over the post-Brexit agreement on Northern Ireland held bulls from placing aggressive bets around the GBP/USD pair. Reports indicate that Ireland is increasingly concerned that British Prime Minister Boris Johnson wants to completely rewrite the Northern Ireland section of the Brexit deal.
In the absence of any major market-moving economic releases from the UK or the US, it prudent to wait for some follow-through buying before positioning for any further appreciating move. Meanwhile, the market risk sentiment and the US bond yields might influence the USD price dynamics, which might provide some trading impetus.
Technical levels to watch
|Today last price||1.4101|
|Today Daily Change||0.0003|
|Today Daily Change %||0.02|
|Today daily open||1.4098|
|Previous Daily High||1.4111|
|Previous Daily Low||1.4036|
|Previous Weekly High||1.4166|
|Previous Weekly Low||1.3982|
|Previous Monthly High||1.4009|
|Previous Monthly Low||1.3669|
|Daily Fibonacci 38.2%||1.4082|
|Daily Fibonacci 61.8%||1.4065|
|Daily Pivot Point S1||1.4052|
|Daily Pivot Point S2||1.4007|
|Daily Pivot Point S3||1.3977|
|Daily Pivot Point R1||1.4127|
|Daily Pivot Point R2||1.4156|
|Daily Pivot Point R3||1.4202|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.