The GBPUSD pair currently finds itself at a particularly interesting situation as both the sterling and the U.S. dollar seem to be greatly affected by external pressures. On the one hand, the pound underwent a tremendous bullish run last year on Brexit optimism, culminating with the signing of a highly anticipated trade deal between the U.K. and the E.U.
Despite the British Government's best efforts to administer the coronavirus vaccine to the general population as soon as possible, the worsening epidemic conditions forced Boris Johnson and his cabinet to tighten the restrictions in the U.K. This, coupled with the now waning Brexit optimism, is already affecting the value of the pound.
On the other hand, the greenback began the new year on a somewhat downbeat note, being impeded by the surge in global demand for higher-risk securities that offer higher yields. In addition to these purely economic factors, the dollar was also affected negatively by civil unrest in the U.S. Despite all of these negative pressures, however, there is light at the end of the tunnel for the greenback.
It is already starting to gain positive momentum against other major currencies, albeit at a slow rate, which can be a precursor to a subsequent recovery. Moreover, this process could be further supported by the upcoming earnings season in a couple of weeks.
|Short Term||Long Term||Net % Gains|
|Net % Gains|
Disclaimer: Your capital is at risk! Trading and investing on the financial markets carries a significant risk of loss. Each material, shown on this website, is provided for educational purposes only. A perfect, 100% accurate method of analysis does not exist. If you make a decision to trade or invest, based on the information from this website, you will be doing it at your own risk. Under no circumstances is Trendsharks responsible for any capital losses or damages you might suffer, while using the company’s products and services. For more information read our Terms & Conditions and Risk Disclaimer.