GBP/USD: Three British developments set to boost sterling

GBP/USD has been rising as the safe-haven dollar retreats from its highs. Optimism about the NI protocol, Britain's vaccine milestone and bullish BoE comments may boost sterling, Yohay Elam, an Analyst at FXstreet, reports.

Fundamentals point to further upside

“The EU and the UK are reportedly negotiating a quid pro quo deal on dealing with trade in Northern Ireland. Brussels has made new offers to London, potentially allowing for a breakthrough that could resolve issues and allow for more fluid commerce. Leftovers from Brexit remain a drag on the British economy and any progress could add another boost.”

“Britain's rapid immunization effort hit a significant milestone – over 50% of the population received at least one jab. This headline, alongside the ongoing fall in cases, is helping the pound despite worries about India's out-of-control covid situation.”

“Another reason to be bullish on the pound comes from the Bank of England. Deputy Governor Ben Broadbent said that he sees ‘very rapid’ growth at least during the next couple of quarters.” 

“Above the daily high of 1.3930, the next resistance line to watch is 1.3950, which held GBP/USD down last week. It is followed by 1.4010, the stubborn April high.”

“Support awaits at 1.3880, a swing high from last week, followed by 1.3860 and 1.3820.”