Profit-Taking in GBP/USD to Continue Near-Term

GBP price, news and analysis:

GBP/USD has been gaining ground for the past fortnight so a short spell of profit-taking is to be expected.
It may not be long, however, before the longer-term upward trend reasserts itself.

GBP/USD profit-taking may continue near-term

GBP/USD is looking weaker in early European business Wednesday after its recent gains. That, though, is to be expected after the previous advance and may continue near-term before the upward trend resumes. Looking at the hourly chart below, a couple of support levels need to be watched: the March 25 low at 1.3670 and the March 30 low at 1.3706. If those break, steeper losses would likely follow.

GBP/USD Price Chart, Daily Timeframe (March 24 – April 7, 2021)

Source: IG (You can click on it for a larger image)

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of clients are net long.

of clients are net short.

Change in	Longs	Shorts	OI
Daily	17%	-11%	3%
Weekly	4%	-13%	-4%

From a fundamental perspective, the latest slip lower may be linked to news that a trial of the AstraZeneca/Oxford coronavirus vaccine in children has been halted while the UK’s medicines regulator investigates a possible link with rare blood clots in adults. However, that should be offset by news that the Moderna coronavirus vaccine is being rolled out in the UK two weeks earlier than expected, making it the third vaccine to be approved in the country.

Moreover, the International Monetary Fund forecast Tuesday that the UK economy would grow by 5.3% this year, up from a previous forecast of 4.5% that it made in January. That compares with forecasts of 3.6% for Germany and 4.4% for the Eurozone as a whole.

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