GBP/USD: Sellers attack 1.3800 even as UK unlock begins, eyes on BOE’s Bailey

GBP/USD stays depressed near three-week low, prints four-day losing streak.
UK aims for gradual exit to lockdown, covid-led deaths drop to the lowest since October.
UK’s Frost alleges Brussels of ‘ill will’ over Brexit.
US Senate passed $1.9 trillion stimulus, Treasury yields stay firmer.

Anil Panchal FXStreet

GBP/USD holds lower ground near 1.3820, down 0.18% intraday, while heading into London open on Monday. In doing so, the cable respects the US dollar gains amid strong Treasury yields while ignoring optimism at home as the UK unlocks after three consecutive lockdowns.

With 82 coronavirus (COVID-19) related deaths in Britain, the lowest since October 2020, Britain is confident of easing the virus-led activity restrictions. However, routine checks for the schools and colleges test the optimism in the UK. Moving forward, the UK will plan to regain its market share in the US, Germany and China, which in turn will require heavy activities to ward off covid and Brexit-led losses.

Elsewhere, Britain’s Chief Brexit Negotiator David Frost dislikes the European warning to go legal over England’s unilateral extension of Northern Ireland protocol. This pushes him to say, per Sky News, “I hope they will shake off any remaining ill will towards us for leaving, and instead build a friendly relationship, between sovereign equals.”

On the other hand, the US Senate passes President Joe Biden’s $1.9 trillion aid package with 50-49 votes and provides another boost to the reflation fears with an anticipated jump in the money supply. Following that, US 10-year Treasury yields recover late Friday’s losses following upbeat US employment data.

Amid these plays, stock futures print remain mildly heavy whereas the US dollar index (DXY) eases from the highest since November 25, 2020, flashed on Friday.

Looking forward, BOE Governor Andrew Bailey is up for speaking about the economic outlook at a webinar hosted by the Resolution Foundation. Although the latest unlock can help the BOE Boss to reiterate his cautious optimism, which in turn tests the GBP/USD downside, bond bears shouldn’t be ignored for fresh impulse. As a result, the US traders’ reaction to the stimulus news will also be the key to watch.

Technical analysis

A daily closing below the 11-week-old rising trend line, currently around 1.3820, will extend the south-run towards an upward sloping support line from March 2020, at 1.3675 now.

additional important levels

Overview
Today last price	1.3828
Today Daily Change	-19 pips
Today Daily Change %	-0.14%
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

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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