GBP/USD has been extending its gains as the UK’s vaccination program is at full speed. As FXStreet’s Analyst Yohay Elam notes, all the ingredients are in place for attacking the 1.40 mark.
Key quotes
“Prime Minister Boris Johnson has now overseen the UK reaching the 15 million people jabbed milestone by February 15. Britain has vaccinated the most at-risk groups in most areas. The achievement is one of the reasons pushing the pound higher, to fresh 34-month highs above 1.39.
“The rapid immunization campaign and the lockdown are responsible for the drop in COVID-19 cases, hospitalizations and deaths recorded in recent weeks. A return to normality would boost the economy in the first quarter of 2021, after recording a better-than-expected advance in the previous one.”
“The US Senate acquitted former President Donald Trump after those voting to convict failed to muster a super-majority. For markets, the quick ending frees Congress to move forward with President Joe Biden’s proposed $1.9 trillion stimulus bill. While the final sum will likely be smaller, it is set to pass by the end of the month.”
“The Relative Strength Index on the 4-hour chart is just above 70 – indicating overbought levels. However, momentum remains to the upside and the cable is holding above the 50, 100 and 200 Simple Moving Averages. All in all, there is a chance that GBP/USD ignores overbought conditions for some time.”
“The new 34-month high of 1.3915 is the immediate resistance line. It is followed by the psychologically significant 1.40 level, and then by 1.4110 and 1.42. Support awaits at the previous peak of 1.3865, then by 1.3825 which was a swing low.”
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