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GBP / USD is recovering amid weakening dollar

The British pound is trying to regain some of the positions it lost the day before this morning. By the beginning of the European trading session, the GBP / USD pair was demonstrating an increase of 0.2%.

 

The decline in the GBP / USD pair may accelerate if the dollar begins to recover previously lost positions. Investors may suspend dollar sales amid renewed two-week lows.

 

Investors reacted positively to reports from recruiting portal Indeed that UK retailers are actively recruiting employees in anticipation of easing quarantine measures and reopening stores. At the moment, the number of vacancies in the retail sector is only 14% below the level before the pandemic. For example, in the first wave of the pandemic, the level of vacancies in this area was below the pre-crisis level by 65%.

 

Investors are hoping that the UK economy will show a good pace of recovery after the relaxation of restrictive measures.

 

Despite this, the dominant influence of the GBP / USD pair is still exerted by the American dollar, therefore, further dynamics of the movement will depend on fluctuations in the dollar index, and not on news from the UK.

 

On the chart, the currency pair tested the support at 1.3730. A recoil movement is now developing from this level. The closest target is the level 1.3790. A resumption of the downward movement should be expected from this level. If the level of 1.3790 is broken, the price may recover to the level of 1.3850.

 

  • Resistance levels: 1.3790, 1.3850, 1.3950;

 

  • Support levels: 1.3730, 1.3660, 1.3590.

 

The main scenario is a rise to 1.3790 and a downward reversal.

 

An alternative option is a breakdown of resistance at 1.3790 and an increase to 1.3850.

 

The current fundamental background is neutral. We consider shorts from levels of 1.3790 and 1.3850.

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