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  • GBP/USD trims early Asian gains amid lacklustre trading.
  • UK’s virus, vaccine optimism battle covid woes in Asia, Northern Ireland riots turn stretch for the second day.
  • British government eyes covid passports with plan to back mass gatherings, concerts after completed jabbing 10% population.
  • US services PMI data, risk catalysts will be the key but off in EU-UK could test the traders.

GBP/USD holds lower ground near 1.3830 during early Monday’s trading. In doing so, the cable steps back from the initial recovery move as the US dollar fizzle ahead of the Easter Monday holidays in Europe and the UK. However, fresh covid woes from Asia and geopolitical tension in Northern Ireland (NI) seem to weigh the cable ahead of the key US ISM Services PMI for March.

Although the Tory government is looking for ways to allot the coronavirus (COVID-19) passports to the Britons for international travels and large gatherings, global markets aren’t taking it seriously amid a covid resurgence in India and China. Also challenging such a plan from UK PM Boris Johnson and company are the doubts over its success after the track-and-trace system’s debacle.

Additionally, geopolitical conditions in Northern Ireland continue to worsen as loyalist communities mark their dissent over post-Brexit trading between NI and the UK as well as local politics in the troubled region with violence.

On the other hand, the US dollar index (DXY) regains 93.00 level after reversing the initial losses as traders consolidate Friday’s losses due to strong US employment data and pullback in US Treasury yields.

Amid these plays, S&P 500 Futures print mild gains around the record top flashed the previous day whereas the US 10-year Treasury yield bounces back to 1.72% after Friday’s losses.

Moving on, GBP/USD traders may keep their eyes on the further vaccine and covid updates for intermediate moves but major attention will be given to March’s US ISM Services PMI as the recent run-up in American data has weighed on the greenback and favored risk-on mood.

Read:  US Services Purchasing Managers’ Index March Preview: Expectations are high

Technical analysis

A confluence of 21-day and 50-day SMAs, around 1.3850, guards immediate upside of GBP/USD prices but sellers are less likely to take entries above a short-term rising support line near 1.3750 by the press time.