CB Consumer Confidence Ahead!
The GBP/USD was closed at $1.4155 after placing a high of $1.4173 and a low of $1.4110. GBP/USD remained lower for the day and extended the previous session's retracement slide, and continued bearish momentum for 2nd consecutive day. In the absence of any new fundamental developments, fears over the long-term impact of Brexit and the economic damage from the pandemic kept the British Pound under pressure. However, a combination of factors helped limit the losses in GBP/USD pair on Monday.
The easing of lockdown measures and the impressive pace of the coronavirus vaccinations in the United Kingdom kept the investors optimistic about the outlook of the U.K. economy. The official data suggested that more than 70% of adults in the country have received their first dose of the coronavirus vaccine. At the same time, some 22 million have also received their second dose of vaccine. The U.K.'s government plan to end restrictions entirely from June 21 combined with the proven effectiveness of vaccines against the Indian variant of coronavirus added strength in British Pound that kept the currency pair GBP/USD steady throughout the day.
Meanwhile, the ongoing decline in the U.S. treasury yields on a 10-year note kept the U.S. dollar bulls on the defensive and limited the losses in GBP/USD pair. In addition, the underlying bullish sentiment surrounding the equity markets also kept the U.S. dollar under pressure and capped further losses in GBP/USD pair. Furthermore, the Bank of England Governor Andrew Bailey said in testimony to lawmakers on Monday that the expected acceleration in prices this year will likely be temporary. The policymakers from the Bank of England pushed back against concerns that the rapid economic rebound from the pandemic will open roads for a damaging wave of inflation.
These comments were similar to Fed officials who believed that the rising inflationary pressure would be temporary and soon fade away as the economy continues its growth toward recovery. After these comments, the British Pound gathered some strength against the U.S. dollar and recovered most of its losses incurred during early trading hours.
On the other hand, the U.S. Dollar was also weak across the board as the U.S. Dollar Index that measures the value of the greenback against the basket of six major currencies, fell to 89.76 level amid the declining U.S. Treasury yields on a 10-year note that reached below 1.60% on Monday. The weak U.S. dollar also kept the GBP/USD pair losses limited in the absence of any major economic event from both sides.
GBP/USD Intraday Technical Levels
Support Resistance
1.4119 1.4182
1.4084 1.4208
1.4057 1.4244
Pivot Point: 1.4146
GBP/USD - Technical Outlook
The GBP/USD is trading at 1.4198 area, getting closer to test the triple top resistance level of 1.4218 level. The pair has closed three white soldiers above 1.4110 level, suggesting odds of bullish trend continuation in the GBP/USD pair. EMA's 20 and 50 periods support the Cable around 1.4142 and 1.4114 levels on the lower side. At the same time, a breakout or a bullish crossover above 1.4218 exposes the GBP/USD towards 1.4284 and 1.4325. On the flip side, violation of 1.4110 support exposes the pair towards 1.4020 Support. Traders will be focusing on the CB Consumer Confidence figures from the U.S. All the best!
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