GBP/USD slips back from multi-year highs as sterling bulls eye 1.4100

  • GBP/USD has been on the back foot in recent trade, slipping back from multi-year highs in the 1.4080s.
  • The main event of the day out of the UK was the unveiling of UK PM Johnson’s “Roadmap to Recovery”.

GBP/USD has been on the back foot in recent trade and has thus slipped back from multi-year highs set earlier in the session in the 1.4080s. But with the pair still trading in the 1.4060s, it is still holding onto gains of around 0.5% or more than 60 pips on the day. Bulls will be looking for a test of the 1.4100 this week if all goes well. 

Driving the day

The UK press is being dominated on Monday by headlines regarding UK PM Boris Johnson’s unveiling of the government’s “Roadmap to recovery” strategy; in a nutshell, there are four stages, each paced at least 5 weeks apart (to ensure the UK’s outbreak doesn’t take a significant turn for the worse), which will see the country gradually reopen and, if all goes as planned, be essentially back to normal by June. While falling infection rates on the mainland imply there is scope for Eurozone countries to ease economic restrictions as well, the bloc’s sluggish vaccine rollout means that they will not be able to do so with the same confidence that this will be the last lockdown.

In other words, (assuming vaccines work, which the data suggests they do) the UK will have most of its adult population vaccinated by the start of summer, meaning a confident reopening without worries of a significant spike in Covid-19 hospitalisations/deaths. The EU is only likely to have 70% of its adult population vaccinated by the end of September, so the need for lockdowns to protect the unvaccinated is much more likely on the mainland. In terms of what this means for GBP; sterling continues to perform well amid ongoing optimism/expectations for a comparatively swift reopening and then economic recovery.

Soft dollar despite usually bullish signals

Turning to the USD side of the equation; it’s been an odd day for the buck. Case in point; the dollar has fallen despite downside in US equities and upside in US bond yields (nominal and real). The former normally give the USD a boost on account of its safe-haven appeal. The latter usually gives the USD a boost by increasing the attractiveness of holding money in US government bonds (which require USD to buy) versus government bonds of other countries.

But this has not been the case on Monday; some market commentators suggested the possibility that early month-end selling might have been in play, after a few major US banks flagged USD sell signals. Others pointed government bond yield rallies in some of the US G10 peers; Australian, New Zealand and Canadian yields have all been on the rise as of late, as have European yields, but not by a significantly greater extent than US yields (or in the case of European yields, by a much lesser extent), so this seems not to be it.

Strength in global commodity prices might also have been a factor weighing on the USD; the Bloomberg Commodity Spot Index just rose to its highest since 2013 amid surging crude oil, Iron ore, copper, precious metal and other commodity prices. Higher commodity prices boost commodity export-dependent currencies such as AUD and NZD at the expense of the buck.

Looking ahead, GBP/USD’s main focus will be on usual themes, such as vaccine rollouts and Covid-19 infection rates. The UK Labour Market Report for January, released at 07:00GMT on Tuesday, will also be closely watched. Meanwhile, heightened attention will be how Fed members react to/interpret the recent move higher in US real and nominal bond yields, as well as on the fact that money markets have now brought forward their expectations for the Fed’s first rate hike to the end of next year, despite the Fed’s current guidance that there will be no hikes through 2023.


Today last price 1.4061
Today Daily Change 0.0055
Today Daily Change % 0.39
Today daily open 1.4006
Daily SMA20 1.3781
Daily SMA50 1.3651
Daily SMA100 1.3401
Daily SMA200 1.3084
Previous Daily High 1.4036
Previous Daily Low 1.3951
Previous Weekly High 1.4036
Previous Weekly Low 1.383
Previous Monthly High 1.3759
Previous Monthly Low 1.3451
Daily Fibonacci 38.2% 1.4004
Daily Fibonacci 61.8% 1.3984
Daily Pivot Point S1 1.396
Daily Pivot Point S2 1.3913
Daily Pivot Point S3 1.3875
Daily Pivot Point R1 1.4044
Daily Pivot Point R2 1.4083
Daily Pivot Point R3 1.4129



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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD: ECB and US Treasury yields to make it or break it

The EUR/USD pair fell to a fresh 2021 low at 1.1892 this week, ending with a handful of pips above this level. The dollar soared across the board following comments from the head of US Federal Reserve Jerome Powell.


GBP/USD: Dollar bulls taking over

The British Pound was among the best performers against the greenback, surging above the 1.4000 level for the first time this week. Soaring US Treasury yields after Powell’s speech sent the dollar skyrocketing. GBP/USD struggling around 1.3900 and at risk of falling further.


Gold still eyes June 2020 lows at $1670 after weekly closing below $1700

Weekly closing below $1700 keeps the XAU/USD sellers hopeful. A bounce towards 50-SMA on 4H cannot be ruled out in the near-term. RSI stays bearish while gold holds within a potential falling wedge.

Gold News

Ethereum price primed for a swift recovery as the network prepares for a major update in July

Ethereum price aims for a significant recovery towards $2,000. A major upgrade scheduled for July intends to fix the problem with gas fees on Ethereum. ETH miners are not happy with the decision.

Read more

US Dollar Index pushes higher to 92.20 on stellar Payrolls

The march north in the greenback remains unabated and trade in fresh 2021 highs beyond the 92.00 hurdle when tracked by the US Dollar Index (DXY).

US Dollar Index News