British Pound (GBP) Outlook - GBP/USD Braced as UK Re-Opening Continues
British Pound (GBP) Price Outlook
- Over 56 million covid-19 jabs have been administered in the UK.
- Pubs and restaurants are now fully open, foreign travel also allowed.
The UK re-opening continues with individuals now allowed inside pubs and restaurants from today, along with indoor socializing and a limited range of foreign travel. This should help re-boot the service sector, an area that has been hit hard by coronavirus lockdowns, with people now able to spend in-store as well as online.
The latest covid-19 vaccination data shows nearly 70% of the adult population have had at least one jab, while just over 38% have had two jabs. This speedy roll-out has enabled the UK government to stick to its re-opening plans, despite worries over a new Indian mutation. The government has said that while this new variant could cause the ongoing re-opening to stall, the current vaccination program works against the new Indian variant, although they remain cautious.
Ahead this week, UK employment/unemployment data on Tuesday, the latest inflation report on Wednesday with the Markit PMIs (May) rounding off the week on Friday. For all market-moving economic data and events see the real-time DailyFX calendar.
GBP/USD is starting the week off little changed around 1.4100 after topping out around 1.4170 last week. The chart set-up remains positive with the multi-month uptrend in place, while all three simple moving averages are in order and pushing higher. GBP/USD is no longer overbought and it seems likely that last week’s high will come under pressure before a re-test of the recent three-year high at 1.4242. Support likely at 1.4000 and 1.3975.
GBP/USD Daily Price Chart (August 2020 – May 17, 2021)
Retail trader data show 41.01% of traders are net-long with the ratio of traders short to long at 1.44 to 1.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBP/USD prices may continue to rise.Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBP/USD price trend may soon reverse lower despite the fact traders remain net-short.
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What is your view on Sterling– bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.