Every trend has a countertrend – yet if the move in the opposite direction has no justification, it could prove short-lived. GBP/USD has bounced off the fresh five-month low of 1.3570 as the dollar has taken a break from gains. The greenback is falling as Treasury yields rise – a change in correlation. It seems that demand for bonds and the dollar are now linked.

Markets’ “Turnaround Tuesday” has helped cable climb from the abyss, but it is hard to find any noteworthy fundamental change that justifies an upswing. First and foremost, COVID-19 cases remain elevated in Britain, nearing 50,000 per day once again. Vaccinations slow the increase in hospitalizations and deaths, but cannot fully keep them down. Read more…

The GBP/USD pair once again showed some resilience below the 1.3600 mark and quickly recovered around 40-50 pips from the daily swing lows. The pair climbed back closer to the top end of its daily trading range, though lacked any follow-through buying and was last seen hovering around the 1.3630 region.

A generally positive risk tone – as depicted by a strong follow-through rally in the equity markets – prompted some profit-taking around the safe-haven US dollar. This, in turn, was seen as a key factor that extended some support to the GBP/USD pair. That said, the impasse over the Northern Ireland Protocol of the Brexit deal, along with the resurgence of the COVID-19 infections in the UK acted as a headwind for the British pound and capped gains. Read more…

The GBP/USD pair remained on the defensive through the early European session and was last seen hovering near the lower end of its intraday trading range, just below the 1.3600 mark.

The pair struggled to capitalize on the previous day’s bounce from the lowest level since February 4 and edged lower for the fifth consecutive session on Wednesday. This also marked the seventh day of a negative move in the previous eight and was sponsored by a combination of factors. Read more…

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