- GBP/USD picks up bids while reversing latest pullback near March 2018 levels.
- UK PM Johnson to provide guidelines for unlock, schools to reopen from March 08.
- Covid variants from South Africa, Brazil reduce as Johnson prepones vaccination deadline to July.
- Chatters over EU-UK tussle, Irish border join vaccine and US stimulus to offer extra filters to the sentiment.
GBP/USD reverses pullback from the fresh high since March 2018, marked early in Asia, while picking up bids to 1.4026, up 0.15% intraday, ahead of Monday’s London open. In doing so, the cable bulls cheer hopes of the UK’s unlock of the virus-led activity restrictions while trying to ignore the Brexit drama.
The Sun came out with the news, quoting UK’s Health Minister Matt Hancock, saying, “there was evidence that the stricter measures – including contact tracing and stricter border measures – had slowed the spread of the new strains.” The news piece also highlights British Prime Minister (PM) Boris Johnson’s readiness to recall the virus-led lockdowns as saying, “This comes as the PM is confident he can speed up the vaccination program to free the country from lockdown sooner than planned.”
Even so, chatters that UK PM Johnson is pressured over the plans to reopen the schools from March 08, as cited by The Guardian, cross wires and keep the GBP/USD bulls chained. Also on the negative side could be feared that Britain will retaliate to the European Union’s (EU) ban on British shellfish.
Further, China’s push for removing the US sanctions and a fresh start to the trade-political ties also weighs on the risks whereas comments from Israel suggesting Pfizer vaccine’s ability to tame the covid variants favor the market sentiment. It’s worth mentioning that the Irish border is going to get tough for the UK’s meat exporters from today until June, which in turn challenges the mood.
On a different page, the Financial Times (FT) cites odds of UK Foreign Secretary Dominic Raab to call for the United Nations’ intervention in China’s Xinjiang province to challenge the sour sentiment.
Against these plays, the equity Futures struggle between gains and losses as the bond yields refresh multi-day high.
Looking forward, comments from UK PM Boris Johnson will be decisive for the GBP/USD pair traders as any disappointment over the lockdown measures can probe the short-term bullish chart formation around the multi-month top. Also, comments from the UK’s Raab will be closely watched and may weigh on the risks, indirectly helping the US dollar, if China chose to retaliate.
Technical analysis
Unless breaking the monthly ascending trend channel, currently between 1.4070 and 1.3890, GBP/USD is likely to keep the upside momentum.
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