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Feb 23 - 11:55 AM

GBP/USD - COMMENT-Sterling Falls Back From Trend High Near 1.41, Eyes Another Rise

By Paul Spirgel  —  Feb 23 - 10:02 AM

Sterling fell to the lower end of the day's range after hitting a fresh trend high near 1.41, suffering along with stocks and speculative plays such as bitcoin but steady on the day and eyeing the potential for more gains once the dust settles.

GBP/USD was outperforming the euro and yen, holding just below the 34-month high of 1.4098 it hit during the European session.

GBP/USD could encounter resistance at 1.4100 due to the possibility of significant option interest nearby, though little resistance was evident as bulls cruised through 1.40.
A rise above 1.41 would set up a test of 100-MMA resistance at 1.4144.

Sterling bulls remain optimistic on UK growth and inflation after UK PM Boris Johnson laid out his plan to ease the UK lockdown nL1N2KS0GG over the next few months, and look forward to comments next week by finance minister Sunak on UK job support proposals next week nL8N2KT1O3.

GBP/USD is likely to remain bid as market participants swap EUR and JPY longs for GBP.
Technically, bulls may seek temporary shelter back within rising daily and weekly upper Bollis by 1.4030, but the rise above the monthly cloud hints at further sterling gains ahead.
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Source:
Refinitiv IFR Research/Market Commentary

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