GBP/USD needs a Biden boost set to break above bullish triangle

February 2, 2021 Off By admin-445
  • GBP.USD has been holding onto high ground amid Britain’s rapid vaccination campaign. 
  • Progress on US stimulus is key to another move higher. 
  • Tuesday’s four-hour chart is showing that the pair is trading in an ascending triangle.
  • Underpromising and overdelivering – something that politicians often fail to do – is what Primer Minister Boris Johnson has been doing on the vaccine front. While Britain’s coronavirus policy deserves considerable criticism, its rapid immunization has been running strong and even accelerating. The government has already surpassed its 500,000 jabs/day target.The UK is well beyond other Western countries in inoculating its population:Source: The UK’s inoculation exceeds that of America and is far better than continental Europe, giving it an economic edge which explains sterling’s advance. While pound traders are awaiting Thursday’s decision by the Bank of England, the focus shifts back to US politics.President Joe Biden met a group of ten Republican senators that offered a stimulus plan worth $600 billion – less than a third of his $1.9 trillion package. Nevertheless, both sides reported a cordial mood and markets want to see more money coming, even if it is minor at first. An agreement with these GOP members would assure the White House a quick, filibuster-proof approval.Will Democrats and Republicans repeat the neverending talks seen in the latter part of 2020 or will they strike a quick deal? That remains an open question, that could determine the next moves. The safe-haven dollar would fall if there is a quick deal and rise on reports of protracted talks. Investors continue shrugging off concerns that COVID-19 variants could be resistant to vaccines and focus on the deployment of vaccines. The upbeat sentiment is also buoyed by a drop in coronavirus cases on both sides of the Atlantic.All in all, the relatively empty economic means stimulus and virus dominate cable’s trading. GBP/USD Technical AnalysisPound/dollar is trading in an ascending triangle, which is a bullish pattern according to technical textbooks. Moreover, it is trading above the 100 and 200 Simple Moving Averages and benefits from upside momentum. On the other hand, the currency pair is still battling the 50 SMA.Support awaits at 1.3650, where the uptrend support line hits the price. It is followed by 1.3610 and 1.3520, stepping stones on the way up.Some resistance awaits at 1.3720, a previous peak, and then by 1.3762, 2020 high. Looking up, 1.3810 and 1.40 are upside targets.