GBP/USD: How Strong is the Optimism of UK Reopening?

GBP/USD is trading higher as the market cools off after its reaction to the lower-than-expected UK PMI numbers. The country’s services PMI in March came in at 56.3 compared to the forecasted 56.8. Besides, the composite PMI missed the estimates of 56.6 at its actual’s 56.4.

However, GBP/USD is finding support in the expected reopening of the UK. The progress of the country’s vaccination program has prompted the gradual reopening of the economy. According to Prime Minister Boris Johnson, the enacted restrictions will be relaxed in the coming week. England will have its entertainment joints, shops, and gyms reopen on Monday. However, the stipulated rules regarding summer travel will still apply.

Investors are also keen on the FOMC minutes later today. The committee’s minutes will offer details of the Federal Reserve’s meeting in March. The focus will be on the current bond-buying program and the country’s state of inflation.  

GBPUSD Technical Outlook

GBP/USD is back up to its prior support level of 1.3820 after dropping to 1.3777 earlier in today’s session. The decline was a reaction to the lower-than-expected UK PMI numbers. However, it remains within the middle and lower Bollinger bands.

The next target for GBP/USD is 1.3850, where it is likely to consolidate for a while. If the bulls manage to move past that point, they will be testing the three-week high of 1.3920. On the flip side, a move below its current support level of 1.3820 will place the next targets at 1.3800, 1.3775, and 1.3700.   

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