Despite today’s slip-up in the GBPUSD, the speculative positions on the British Pound remain tilted towards the long end of the pole. This is according to the latest CFTC positioning report, as further rollout of the UK’s coronavirus vaccination program and the falling infection rates boost investor sentiment on the Cable.
The UK appears to be on track to achieve complete vaccination of at-risk groups by the middle of the month. Analysts at TDS Securities believe that any gains in the Pound would be vaccine-based, which puts the sterling in a good position to benefit from the achievement of this milestone.
Net longs in the GBP were up for the 2nd straight week, hitting two-week highs. The Sterling got some serious support last week from the Bank of England’s decision not to head into the negative-interest-rate territory in the immediate future. Speculative positions on the USD remain in negative territory despite last week’s upside in the US Dollar. This scenario lends support to the positive sentiment on the GBPUSD.
Technical Outlook for GBPUSD
The pair is currently trading 0.28% lower and is testing the support at 1.37025. A successful violation of this price level opens the door towards the 1.36117 support, with 1.35134 serving as the immediate support to the south.
On the flip side, a bounce on the present support could allow for price to continue the recovery, targeting 1.37916 in the process. A push above this area sends the GBPUSD to levels not seen since April 2018. At stage, the 15 January 2018 high at 1.39484 becomes the new target.
GBPUSD Daily Chart