The GBPUSD pair is trading higher today, but near-term longs appear capped even as the latest CFTC positioning data indicate that the Pound saw an increase in net long positions to pre-pandemic levels. However, this rise in speculative longs on the Pound may be a function of USD weakness rather than inherent fundamentals of strength on the Pound.
Furthermore, last week’s downbeat data out of the UK has once more brought up talk about negative rates. This appears to be dampening the optimism that followed the post-Brexit trade deal.
Technical Levels to Watch
Despite the vaccine rollouts and the rise in speculative longs on the Pound, the short-term picture on the GBPUSD shows a pair under pressure. The 1.37025 price level serves as the resistance to current price activity. This resistance is the barrier that stands between buyers and the 1.37916; an advance beyond 1.37916 invalidates the rising wedge and could open the door for more upside moves.
However, the rising wedge has bearish significance. If bulls cannot overcome the 1.37025 resistance, the price immediately comes under pressure, putting the wedge’s lower edge at risk. A breakdown of this border targets 1.36117, with a measured move projected to push towards 1.33951. This move requires the price to take out 1.35134 and 1.34765 to actualize the projected move.
GBP/USD Daily Chart