GBP/USD has rebounded to 1.42. Happy Friday for bulls? Fading Fed fears, upbeat UK data and technicals point up, as FXStreet’s Analyst Yohay Elam, notes.
Friday’s four-hour chart is pointing to further increases
“The greenback gave back some ground it gained after the Fed’s meeting minutes showed that some members conditionally supported having a discussion about printing fewer dollars at some point. Despite the subtlety of that single passage in the protocols, the currency bounced late on Wednesday before fading away.”
“Retail Sales figures for April have shown a leap of 9.2%, far above expectations and joining a winning streak of British economic publications this week. Earlier on, the UK reported a surprising drop in the unemployment rate to 4.8%. Markit’s PMIs will likely show significant optimism among businesses.”
“What can derail the rally? The strain of COVID-19 first found in India remains of concern as it is spreading fast in the UK. However, all the evidence has shown that vaccines beat this variant and there are good chances that the next stage of Britain’s reopening remains on course on June 21.”
“The Relative Strength Index (RSI) on the four-hour chart is well below 70, allowing room for the pair to rise. Moreover, after a dip below the 50 Simple Moving Average, GBP/USD shot higher and momentum remains to the upside.”
“The daily high of 1.42 is the first line of resistance, and it is followed by May’s peak of 1.4220 and finally by the 2021 top of 1.4240.”
“Some support is at 1.4160, which capped cable earlier this month. It is followed by 1.41 and then by 1.4075.”
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