GBP/USD: Sterling to rebound if jitters related to jabs subside

GBP/USD has been tumbling down amid a worsening market mood and weak UK data. Nevertheless, oversold conditions and Boris' efforts may trigger a rebound, Yohay Elam, an Analyst at FXStreet, reports.

See: GBP/USD to extend the decline to the 1.3600 level – OCBC

Key quotes

“Brussels is drafting rules that may not only limit exports of inoculations but also raw materials. Ahead of an EU Summit on Thursday, UK Prime Minister Boris Johnson is trying to soothe tensions and find a compromise that would allow Britain to continue its successful campaign. Concerns about a halt to jabbing are weighing on sterling and a solution could help it recover.” 

“Jerome Powell, Chairman of the Federal Reserve, said that inflation may rise in the coming months, but is unlikely to become persistent. Treasury Secretary Janet Yellen also vowed to assist the recovery but remained mum on the administration's potential infrastructure plans.”

“Yellen and Powell will testify again on Wednesday and other Fed officials will also speak. Investors will also be eyeing investment figures – Durable Goods Orders statistics for February are forecast to show increased expansion.”

“Pound/dollar has broken below the double-bottom at 1.3775 and uptrend support. It also suffers from downside momentum on the 4-hour chart. However, the Relative Strength Index has dropped below 30 – entering oversold conditions and implying a bounce.”