- GBP/USD wavers around weekly top, up for third consecutive day.
- Export delays are mounting among British manufacturers, UK’s Frost issues warning to EU over legal reaction to NI protocol.
- UK reports above 100 deaths for second day, British virus strain has strong correlation to death toll per a study.
- US stimulus passage, hopes of more US funds for infrastructure and easy yields keeps traders positive ahead of Biden’s speech.
GBP/USD seesaws near the weekly high of 1.3940, currently around 1.3930, while heading into Thursday’s London open. In doing so, the cable rises for the third consecutive day and refreshes the weekly top too despite downbeat British fundamentals, except for unlock news. The reason could be traced from the passage of US President Joe Biden’s $1.9 trillion stimulus and receding reflation fears.
As per the Make UK, Britain’s manufacturing lobby, 4% of its members had faced delays in the past three months and many were still struggling to get goods through ports. The same joins Financial Times (FT) claims to suggest further hardships for UK food manufacturers as paperwork for export to the European Union (EU) will escalate from April 21.
While Brexit pessimism pushes some members of the British parliaments to urge Tory leaders to step back, UK’s Brexit negotiator David Frost vows to ‘defend the UK vigorously’, per Daily Express, over legal threats from Brussels over the Northern Ireland (NI) border issue.
Also on the negative side could be the three-day high coronavirus (COVID-19) death toll in the UK, 190 for Wednesday, as well as fears that the UK Covid-19 variant has a significantly higher death rate. As per the study published in a British Journal, infection with the new variant led to 227 deaths in a sample of 54,906 Covid-19 patients, compared with 141 among the same number of patients infected with other variants.
On the other hand, US policymakers passed the much-awaited $1.9 trillion stimulus and the bill is ready for President Joe Biden’s sign, scheduled for Friday. However, a scheduled speech for 13:00 GMT by the Democratic leader may favor the cable bulls amid anticipated risk-on mood.
Portraying the mood are upbeat stock futures and Asian stocks but the US 10-year Treasury yields waver near 1.53% in search of fresh clues.
Technical analysis
Given the upbeat RSI conditions that join the quote’s successful run-up beyond an ascending support line from December 11, 2020, GBP/USD buyers are likely to overcome the immediate SMA hurdle around 1.3940. However, any further upside needs to refresh the monthly top above 1.4020 before eying the multi-month high of 1.4243 marked the previous month. On the flip side, the 10-day SMA and previous resistance line, respectively around 1.3905 and 1.3840 can entertain the sellers during any pullback moves.
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