GBP / USD slightly broke highs as US yields rose and ahead of Prime Minister Johnson’s speech. A cautious reopening of the UK could weigh on the pound sterling, but the remarks by Fed Chairman Powell could push the dollar down, reports Yohay Elam, analyst at FXStreet.
According to the BBC’s Laura Kuenssberg, there will be a five-week gap between the lockdown lift stages – a snail pace compared to expectations. The promise of a slow exit from the lockdown is that it will allow more people to be immunized and also decrease the chances of having the economy shut down again. For now, Boris’ lack of bravery seems to be getting the better of the pound’s sails.
Powell is expected to testify before Congress on Tuesday and his prepared remarks could be released as early as Monday. If it reiterates the bank’s desire to do more and opens the door to increased bond purchases, yields could fall and the dollar could rise. While he is unlikely to engage in any further stimulus that is imminent, Powell’s pledge to do more could provide the next higher stage for the GBP / USD. “
“The new multi-year high of 1.4052 is the first level of resistance to watch. It is followed by 1.4145, 1.4255 and 1.4370, all dating from 2018. ”
“Support expects daily low of 1.3980, then 1.3950 and 1.39 which served as a springboard for the rise.”