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May 03 - 11:55 AM

GBP/USD - COMMENT-Sterling Bulls Working Overtime, Break 10-DMA Resistance By 1.3901

By Paul Spirgel  —  May 03 - 10:29 AM

GBP/USD vaulted higher on Monday, rising above 10-day moving average resistance at 1.3901 and recovering most of the previous session's losses while preparing for BoE and U.S. non-farm payrolls event risk.

Trade was thinned by the UK bank holiday FXHEAT but sterling received an additional boost from unexpectedly weak U.S. ISM manufacturing data, while outpacing other major currencies rallying against the dollar as U.S. 10-year Treasury yields slipped, remaining well below March 30's 1.776% 2021 high.

Sterling has been rangebound within its 30-day Bolli envelope since late March, but in the upper portion between the 30-DMA by 1.3824 and the upper 30-day Bolli at 1.3987.

An upcoming drop in the cloud base may pressure the pound lower, putting a renewed focus on the bottom end of the recent Bolli range after repeated failed attempts to move higher.

Sterling gains versus the dollar benefited from the Fed's low-for-longer rate view, but it has lost ground versus the euro amid accelerating euro zone COVID vaccinations.
Friday's payrolls EM may be a tipping point.
A miss could support a run at 2021 highs.
For more click on FXBUZ


GBP Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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