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The removal of the Brexit weight plus the successful vaccination drive had driven the GBP higher. However, the latest trade prints are reminding of Brexit’s negative realities, and the vaccination positives must fade eventually as Europe and ROW catch up, as reported by OCBC Bank. GBP/USD remains pressured below 1.38.

Key quotes

“The GBP/USD’s recovery stalled at the 1.3800 resistance. Technicals still look negative, while short-term implied valuations are sharply lower compared to spot.”  

“As the positives from the vaccination drive fade, more attention will be placed back on the post-Brexit realities. This leaves us tempted to explore tactical shorts on this pair, targeting the previous low at 1.3670.”