Yesterday the GBP had the day we all expected to happen last Thursday, following the Bank of England MPC, where they slowed their asset purchase program. The reluctance to buy was a caused by a concern about UK local elections, particularly for the Scottish Parliament.
The results were favorable to the Johnson Government, who are fully committed to reopen the UK economy in the coming weeks, fueled by a successful vaccine rollout. Growth in the UK economy is expected to hit 7.25% this year.
GBPUSD
Resistance at 1.4160 is keeping the lid on GBP/USD for the moment and has seen a little profit taking set in. They are some buyers looking to enter at 1.4100.
If the the GBP pulls back further, you will find support in the 1.4040/60 region. From this level I would expect a resumption of the uptrend toward 1.4160 resistance and 1.4200
GBP/JPY
GBPJPY is struggling this morning to keep upside momentum going, 154.00/20 is providing resistance. If this level holds I would expect to see a drop back to 153.10/30 which will find support from buyers.
If the correction is deeper you may see 152.40/60 before heading higher again.
EURGBP
The GBP broke support yesterday at 0.8660 and 0.8620 in a storming performance against the EUR. Some profit taking below 0.8600 should slow the sell off and could see a rebound towards resistance, which will now be found at 0.8620/30 and at 0.8660/70
EURGBP Support is at 0.8560/80 then 0.8520.
GBPCHF
The GBP has tried on a number of occasions to break resistance at 1.2740 and has failed. Despite all the gains against the JPY, EUR and USD. The CHF is the one that has been hardest to crack.
With 1.2740 holding I would expect to see a pull back to 1.2680/70 but not too much further. However if we do see a bigger drop 1.2600/20 will provide a firm base and ideal entry point.
When 1.2740 does break the target will be 1.2800 and 1.2860 in extension.
Analysis from point & figure charts provided by http://www.eightdragonscapital.com
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