GBP/USD: Bulls eye the 1.39 level amid Britain’s reopening

GBP/USD has been held back by concerns about a hedge fund consolidation but Britain’s reopening and the unblocking of the Suez Canal are set to support cable. As FXStreet’s Analyst Yohay Elam notes, bulls eye 1.39 as upside target.

See:  GBP/USD to slump to the 1.3670 mark as Brexit reality looms – OCBC

Key quotes

“Thirty million Brits have received at least one vaccine dose – and that serves as a shot in the arm to sterling. The nation now allows larger gatherings and other activities that were prohibited until now, moving cautiously while cases continue falling.”  

“Good news comes from Egypt, where authorities are refloating the previously stranded Ever Given mega-ship, and allowing global trade to gradually return to normal. While the six-day blockade has hit the movement of some 450 vessels, the traffic jam has likely caused only limited damage.”

“Fears come from the rapid liquidation of Archegos Capital, a hedge fund that took leveraged loans and its collapse is now hitting the balance sheets of several banks. While the dust is about to settle around that firm, some worry that there are additional such distressed companies.”  

“After surpassing the 50 Simple Moving Average, some resistance is at 1.3850, where the 100 SMA awaits it. Critical resistance is at 1.39, which is where the 200 SMA converges with a support line from mid-March.”

“Some support awaits at 1.3810, which provided support last week, followed by 1.3775, a cushion from early March.”