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Feb 11 - 01:55 PM

GBP/USD - COMMENT- Sterling Bulls Rebuffed By 2021 High, Hold Support Above 1.3800

By Paul Spirgel  —  Feb 11 - 11:35 AM

Sterling retreated on Thursday, falling to session lows at 1.3810 after its earlier rise failed to surpass the previous session's 34-month high, but it remained underpinned after recent gains.

Broad dollar and euro weakness have driven sterling's recent rally, with the last push higher coming on Wednesday after Chair Jerome Powell reiterated the Fed's low-for-longer rates view.

Sterling's rosy outlook has been bolstered by a steady flow out of dollars as bitcoin rallies.
In addition, ECB concerns about low growth and currency strength
nF9N2CA02M are pushing EUR/GBP lower as entrenched EUR spec longs 1099741NNET lighten positions.

Sterling can continue to grind higher with nearby bull targets at the 2021 high and upper 30-week Bolli at 1.3865 a mere speed bump, followed by 1.3872's monthly cloud top on the way to tipped option interest at 1.4000 and late April 2018's 1.4030 high.

However, sterling's rise is not a foregone conclusion, with COVID remaining a risk.
A pronounced rise in cases as the virus evolves could put the pound's outlook in jeopardy.

For more click on FXBUZ


GBP Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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