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Apr 12 - 11:55 AM

GBP/USD - COMMENT-Sterling Rallies Off Sub-1.37 Support, More Work To Mend Tech Damage

By Paul Spirgel  —  Apr 12 - 09:57 AM

GBP/USD rallied on Monday, rising nearly one big figure from a fresh April low with the help of EU-UK engagement over Northern Ireland nS8N2K6007 and the end of lockdowns, but it has more work to do to fix recent technical damage.

Cable was helped by broad dollar weakness ahead of upcoming U.S. CPI Tuesday, and retail sales data Thursday EM, as well as comments by Fed Chair Powell on Sunday nN9N2JO01M, cautioning of risks to U.S. growth of reopening the economy too soon.

After recent losses, GBP/USD's bearish structure remains intact as the pound remains below the daily cloud and hovers near its recent trend low by 1.3670, near 100-day moving average and lower 30-day Bolli support.

A close below 1.3670 would open the way for a run lower toward the Feb. 4 low at 1.3566 and the 200-DMA by 1.3336.

On an optimistic note for sterling bulls, the recent reduction of significant USD IMM shorts and a upcoming cloud twist, in early May, may usher in another round of broad dollar selling, possibly providing support for cable.

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GBP Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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