Sterling had a stellar start to the week, enabling Cable to go above and beyond the 1.39 handle. Economists now believe the stage now seems set for a move towards March swing highs, around the 1.40 mark. On its sixth day of gains GBPUSD was reached a monthly high of 1.3991. The bearish pressure surrounding the US dollar remained unabated amid expectations that Powell and the Fed will keep interest rates lower for a longer period. A weaker Greenback also meant gains for EURUSD. A fresh round of selling pressure in the US Dollar has allowed EUR/USD to break above the 1.20 mark this morning after several days of tough resistance. The round, psychological number had halted many attempts to push higher last week, weakening the bullish potential in the pair. But the sideways trend of the last few days seems to have been enough to allow positive momentum to gather again.
The good thing for the euro is that the vaccination rate in the continent continues to pick up steam and the improvement in this area is unlikely to be fully priced into the common currency, allowing for more support in the coming weeks. That said, the risk from the other side of the pair is also present. The weakness in the US Dollar is related to weakening bond yields and an improving economic outlook, but a reversal in any of these factors would see a quick rebound from the safe-haven currency, putting downward pressure on EUR/USD.
GBPUSD opened the week at 1.3852 and finished the day at 1.3985.
GBPEUR started the week still in the 1.15’s at 1.1577 but was able to climb to 1.1634.
EURUSD opened Monday at 1.1966 and closed at 1.2020.