Sterling’s rally gains strong upside momentum again today, with the support of rise in UK treasury yields. 10-year Gilt yield is currently up 0.016% at 0.48%. It’s now pressing an important psychological zone around 0.50%., which was the floor before the pandemic.
4 hour MACD in GBP/USD suggests that the rally in accelerating. Focus is now on 61.8% projection of 1.1409 to 1.3482 from 1.2675 at 1.3956. Decisive break there will bring further rally to 1.4376 (2018 high). But to do that, we’d probably need 10-year Gilt yield to break through 0.50% decisively. We’ll keep an eye on both developments.
