GBP/USD: Vaccine optimism and Georgia’s elections to boost sterling

The whole of the UK has entered a severe lockdown reminiscent of the spring, which includes the shuttering of schools. GBP/USD dropped sharply ahead of Johnson’s announcement and seems to have stabilized afterward. Yohay Elam, an Analyst at FXStreet, believes that sterling is ready to rally on hopes about an accelerated vaccine campaign as harsh lockdown locked into the price.

See – GBP/USD to revisit the 1.3540/1.3483 September and early December highs – Commerzbank

Key quotes

“Prime Minister Boris Johnson asked the nation to stay at home as hospitals are overwhelmed by the rapid spread of COVID-19. There is growing evidence that the B.1.1.7 virus strain is responsible for the accelerated spread, also prompting many countries to ban travel to and from the UK. To add insult to injury, some worry that the South African variant could even be resistant to vaccines. Further information is needed.” 

“Johnson is trying to ramp up the relatively slow immunization campaign. While Britain easily leads European countries, only some 1.4% have received the jabs so far. That could change now with Johnson’s emphasis on vaccines and the deployment of the homegrown University of Oxford/AstraZeneca inoculations. The government aims to administer vaccines at a pace of two million per week. These aspirations – even if unachieved – can boost sterling.” 

“Recent opinion polls from the Peach State have shown that President-elect Joe Biden’s candidates have picked some steam in the run-up to the vote. If these surveys turn into reality, Democrats would have effective control of the Senate.”

“Some resistance awaits at 1.3610, the daily high, followed by 1.3703, the 2021 peak. Support awaits at 1.3555, the daily low, followed by 1.3480 and 1.3440.”