Latest GBP USD Analysis and ForecastUpdated April 12th, 2021
US Dollar strength on higher relative yields; Pound weakening with vaccine out performance strength fading
- The US Dollar rebounded after immediate weakness after the 7th March Fed Meeting
- This strength resumed through March, but has seen more of a consolidation theme from late March into April
- This US Dollar strength has been assisted by US Treasuries move to higher yields, alongside US yield spread widening versus many other government bonds
- The Pound is weakening against Major currencies (e.g. the Euro), with the relative, positive benefits from the impressive UK vaccine rollout priced in
Rebound stall, but still a negative bias
Day trade update and view
A Monday rebound and a stall, after a prod below the March cycle low at 1.3670, but a stall from below 1.3794, thereby sustaining bear forces from the early April plunge lower from new impulse resistance at 1.3838 through various supports, plus from the significant, latter March reversal below the the up trend lines from March and November 2020, to leave the bias lower for Tuesday.
Day trade setup
- We see a downside bias for 1.3706/00; a break here aims for 1.3670/69, maybe 1.3632.
- But above 1.3794 quickly aims for 1.3838, which we would look to cap. Above possibly opens risk up towards 1.3919.
The early March push below 1.3829 signalled an intermediate-term shift to a bear trend.
- Downside risks: We see an intermediate-term bear trend to aim for 1.3566, 1.3138/34 and 1.3000.
- What changes this? Above the strong 1.4001/26 resistance area shifts the intermediate-term bear trend straight to an intermediate-term bull trend.
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