The GBP/USD is soaring this Monday as the UK government is considering reopening the UK economy a month ahead of schedule.
The Pound is benefitting from a proposal by the UK government to reopen the economy ahead of schedule, as the number of coronavirus vaccinations hit 15 million. This target was hit 2 days ahead of schedule and could clear the way for schools to reopen and for lockdowns to be lifted. The government has also cleared the way for 17.2 million people to be vaccinated by the end of April and has asked those over 65 years to present themselves for vaccination.
The UK PM Boris Johnson is expected to give a much-anticipated speech about the government’s plans on February 22. However, investors appear pleased with the government’s effective rollout of the vaccination relative to its peers.
A Capital Economics report has predicted that the GBP/USD could hit its pre-Brexit levels this year. With the BoE also declining to delve into negative interest rate territory and the latest CFTC Positioning report showing net long on the Pound at 1-year highs, the GBP/USD could be riding a bullish wave at the moment.
Technical Levels to Watch
The large channel on the daily chart appears to be dictating price action. The pair is now pushing towards 1.39484, having cleared the 1.37916 resistance easily. Above this level, the 1.39971 high of 25 April 2018 could be the next upside target as the cable pursues three-year highs.
On the flip side, a rejection at 1.39484 could lead to a retreat that could provide for a retest of 1.37916, acting as a support. A breakdown of this area could put the channel’s lower edge at risk.
If the channel gives way, then 1.37025 and 1.36117 could line up as potential targets to the downside in the first instance, with 1.35134 also remaining relevant to price action.
GBP/USD Daily Chart