The GBP/USD pair closed at 1.36673, after placing a high of 1.37102, and a low of 1.36109. After posting losses for two consecutive sessions, the GBP/USD currency pair advanced on Tuesday, placing minor gains, despite the strength of the US dollar on the day. This week, the GBP/USD continued to see mixed movements, as both currencies strengthened. However, the British Pound struggled to climb higher against the US dollar, as the pair was close to its best levels in years.

The British currency was strong on Tuesday, as investors continued to buy Sterling against major rivals, because of the bullish market mood surrounding the UK currency. The appeal of the Pound was largely due to optimism that Britain’s coronavirus vaccine programs were further along than those of other major economies. The UK was set to confirm that residents at every eligible care home in England have been offered a coronavirus vaccine, even as a dispute over exports from Europe raised concerns over supplies. The UK aims to offer vaccines to about 15 million people in its top four priority groups by Feb 15.

On Monday, the UK expanded its vaccine pipeline by exercising an option to order another 40 million doses from Valena SE, bringing the total to 100 million doses. Prime Minister Boris Johnson described the care home figures as a crucial milestone in the ongoing race to vaccinate the most vulnerable. Even so, he warned that the number of cases and people in the hospitals remained dangerously high.

On Tuesday, Britain launched an emergency program of door-to-door testing in several areas, following the discovery of hundreds of cases of the coronavirus variant first identified in South Africa, that scientists say could be more resistant to vaccines. Furthermore, the Health Minister at Hancock said that the government was considering modifying existing coronavirus vaccines to address variant strains of COVID-19. He added that the government was working closely with scientists and pharmaceutical companies to determine how effective the current vaccines are against the new variants.

All these developments in Britain, just to curb the spread of the coronavirus and support its economy through this crisis, were encouraged by investors, as it will help the British economy and lift the British Pound. Ultimately, this pushed the GBP/USD pair higher on Tuesday.

On the data front, at 20:00 GMT, the IBD/TIPP Economic Optimism came in, indicating a surge to 51.9, against the projected 51.0, which supported the US dollar and capped any further gains in the GBP/USD pair. From the British side, the Nationwide HPI for January dropped to -0.3%, against the expected 0.3%, weighing on British Pound and capping any further upside in the GBP/USD pair.

On the US dollar front, the safe-haven currency gained during this time of market uncertainty, supported by the weakness of its rival currency, the Euro, which is under pressure due to concerns about the coronavirus situation in the Eurozone and a deterioration in the supply of vaccines. The US Dollar Index, which measures the value of the greenback against a basket of six currencies, was up to its highest level in 8 weeks on Tuesday, which weighed on GBP/USD pair.

Daily Technical Levels

Support               Resistance

1.3625                 1.3728

1.3589                 1.3795

1.3521                  1.3832

Pivot Point:       1.3692

The GBP/USD is trading with a bearish bias at the 1.3659 level, holding below an immediate resistance level of 1.3684. On the lower side, a continuation of a selling trend could extend selling until 1.3615. The 10 and 20 periods EMA support the selling trend; we should therefore consider taking a sell trade below the 1.3685 level today. Good luck!