GBP/USD: Teases intraday top above 1.3800 as UK’s unlock optimism battles US dollar recovery
- GBP/USD eases from two-week top after rising from five consecutive days.
- DXY bounces off one-month low amid mild risk aversion wave.
- UK undertakes covid reinfection study, eight countries are on travel green list.
- US President Biden’s infrastructure spending in limbo, covid fears gain ex-UK, US.
GBP/USD picks up bids near the intraday high of 1.3840, up 0.03% on a day, while heading into Monday’s London open. In doing so, the cable cheers the UK’s advantage of faster vaccinations and unlock guidelines to shrug off the US dollar’s bounce off late the lowest since late March.
Having jabbed a considerable British population, UK scientists are analyzing the risk of getting reinfection on the vaccinated people. Reuters quoted Helen McShane, a University of Oxford vaccinologist and chief investigator on the study while saying, "The information from this work will allow us to design better vaccines and treatments, and also to understand if people are protected after having COVID, and for how long.”
Furthermore, the British government will announce the list of countries safe to travel and are allowed in the UK during the next month. As per the latest market chatters, only eight countries are on the list, suggesting hidden fears of virus resurgence. On a different page, the UK’s medicine providers are tired of red tape and the associated costs while sending medical supplies to Northern Ireland, which in turn flashes Brexit risk and can weigh on the Sterling if magnified.
Alternatively, Europe is struggling with the virus as the global virus-led death toll climbs above three million. Moving on, US President Joe Biden’s $2.25 trillion infrastructure spending bill has a tough road ahead as Republicans push for tax cuts and spending reduction.
Amid these plays, stock futures step back from the recent multi-day tops whereas the US 10-year Treasury yields also ease amid a quiet session in Asia.
Looking forward, the UK’s employment data, up for publishing on Tuesday, will be the key for the GBP/USD pair but traders shouldn’t ignore risk catalyst before that.
Technical analysis
Unless staying beyond 200-SMA and the previous resistance line from April 08, around 1.3825-20, GBP/USD buyers can keep attacking March 19 high near 1.3960.
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.
