GBP price, news and analysis:
- GBP/USD has broken above the January 27 high at 1.3759, reaching its highest level since April 30, 2018.
- That sets it up well for further advances, with the April 17, 2018 high at 1.4377 the long-term target once psychological resistance at 1.40 has been broken.
GBP/USD well placed for further gains
GBP/USD is looking strong, breaking above its January high and reaching its highest level for almost three years. From a technical perspective it is therefore in a good place to breach psychological resistance at the 1.40 “round number” and eventually reach the high above 1.4375 last seen in April 2018.
GBP/USD Price Chart, Daily Timeframe (August 31, 2020- February 9, 2021)
Source: IG (You can click on it for a larger image)
Sterling has benefited from the positive tone in the markets based on the prospect of a large US fiscal stimulus package and positive coronavirus vaccine news. That has lifted US stock indexes to record highs, with the so-called reflation trade weakening the US Dollar but boosting currencies like GBP, EUR and AUD, as well as gold and oil.
Inflation is now seen as a potential concern when the global economy recovers from the Covid-19 pandemic, suggesting that central banks, including the Bank of England, will have to tighten monetary policy as their economies expand.
We have a report here on how central banks impact the FX market
We look at currencies regularly in the DailyFX Trading Global Markets Decoded podcasts that you can find here on Apple or wherever you go for your podcasts
--- Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex
