GBP/USD: Sluggish around 1.4150 as Brexit, reflation woes battle UK unlock optimism

GBP/USD drops for the second consecutive day, around an intraday low of 1.4137, amid Monday’s Asian session.  In doing so, the cable pair struggles to justify tapering fears and upbeat sentiment over the UK’s easing of virus-led activity restrictions, not to forget Brexit woes.

The Sun spots Dr. Jenny Harries, head of National Health Service (NHS) Test and Trace, as well as UK Health Minister Matt Hancock to say, “England’s lockdown could end on June 21, say experts after tests proved British vaccines are effective against the Indian Covid variant.” The news piece also marks Pfizer and AstraZeneca vaccines’ success in taming the coronavirus (COVID-19) Indian strain to echo their optimism.

Elsewhere, Reuters quote French Foreign Affairs Minister Jean-Yves Le Drian, speaking on RTL ration, as saying, “France does not rule out “slightly tougher” health measures for travelers from Britain.” It’s worth mentioning that France's European Affairs Minister Clement Beaune also warned “Britain not to play games with special post-Brexit trading rules for Northern Ireland, as fears rise of a summer of violence in the province,” per AFP. Also portraying the Brexit fears could be the challenges to the UK-Norway trade deal.

Amid the Brexit and covid plays, the Confederation for British Industry (CBI) said, “Business and government should put the bitter divisions of Brexit behind them and focus on building a fairer, greener economy.”

Additionally weighing the GBP/USD prices could be the latest reflation fears, mainly emanating from the US, as well as the UK carrier strike group’s seven-month journey, carrying the strength of nine ships, 32 aircraft, and 3,700 personnel, towards the Indo-Pacific region.

Amid these plays, S&P 500 Futures reverse early Asian losses as the US Treasury yields and US dollar index (DXY) consolidate Friday’s gains.

Moving on, UK Interior Minister Priti Patel’s plan for Britain's “digital border” could entertain GBP/USD traders but major attention will be on the reflation, Brexit and unlock headlines amid a light calendar.

Technical analysis

Although a downside break of a seven-day-old support line, near 1.4160 by the press time, keeps GBP/USD sellers hopeful, a 10-day SMA level of 1.4126 probes the short-term bears.