GBP/USD keeps the longest weekly rally in three years above 1.4100

GBP/USD steps back from an intraday high of 1.4150 to 1.4138 during Thursday’s Asian session. Even so, the cable prints mild gains on a day while rising for the sixth consecutive week, the biggest run-up since 2018, by press time.

While tracing the moves, the Daily Mail’s headlines suggesting easy money in next week’s British Budget are likely the key catalysts. UK Chancellor Rishi Sunak is up for presenting the annual budget statement and chatters are loud that the British diplomat will not only step back from his earlier tax-hike concerns but also take steps to make sure the economy booms shortly.

Read: UK Chancellor Sunak planning to inject the UK with a post-lockdown boom

Other than the UK budget news, the US dollar weakness and the broadly upbeat market sentiment also favored the GBP/USD bulls. The US dollar index (DXY) struggles around 90.00, the lowest since January 13, by press time. Also portraying the risk-on mood could be the US 10-year Treasury yields and S&P 500 Futures.

Global markets recently turned optimistic after the Fed policymakers rejected reflation fears and showed readiness to keep pumping the economy unless witnessing a sustained performance of benchmarks, like inflation and unemployment rate. The coronavirus (COVID-19) vaccines and US President Joe Biden’s push for microchip buying, as well as US covid stimulus, add colors to the positive trading sentiment.

Looking forward, a lack of major data/events can challenge the GBP/USD upside while the pre-US Q4 GDP caution may trigger the pullback moves.

Read: US January Durable Goods and Q4 GDP Preview: Consumers worry but they spend

Technical analysis

Bulls seem to get cautious off-late, as GBP/USD struggles above 1.4200, which in turn requires traders to closely watch an ascending support line from February 04, currently around 1.3975, during the pullback moves.