GBP/USD: Britain's vaccination campaign and upgraded GDP to propel sterling

The GBP/USD pair has turned a corner and is on the way up as sterling shines on UK vaccines, dollar breather and rosier technical picture, Yohay Elam, an Analyst at FXStreet, reports.

See: GBP/USD to trace out a corrective decline towards the 1.3532 mark – DBS Bank

Key quotes

“The most recent piece of good news from the UK was the upgrade of Gross Domestic Product statistics for the fourth quarter of 2020 – 1.3% against 1% originally reported. However, the primary driver for sterling's success is Britain's rapid vaccination campaign – which is bearing fruit.”

“The US dollar has taken a breather from its gains as Treasury yields are off the highs. One of the drivers for the cooling in the bond sell-off comes from details of President Joe Biden's infrastructure plan. The Commander in Chief plans to raise taxes to fund his grand $2+ trillion expenditure, which implies less debt issuance, thus higher values for bonds – lower yields which are negative for the dollar.”

“The 4-hour chart is pointing to higher lows. Pound/dollar bottomed out above 1.37 and crossed the 50 Simple Moving Average on its way up, while flipping momentum to the upside.”

“Cable is still battling 1.3780, which was a support line in early March. It is followed by 1.3820, a swing high that was seen last week.”

“Support awaits at 1.3735, which capped GBP/USD last week. It is then followed by 1.37 and finally by 1.3670, the March low.”