Deutsche Bank upgraded UK forecast
What happened?
Deutsche Bank, a well-known German investment bank, has raised its growth forecasts for the UK for the current year. The bank claimed the British economy will almost fully recover to its pre-pandemic levels by the end of the year. Unlike the UK, the forecast for the EU was downgraded. While the Euro Area pauses its vaccination campaign, the UK keeps the current pace, which should help the country to rebound faster.
What does it mean?
The market optimism over the UK will underpin the pound and help it to rally up further. Besides, the worse-than-expected US sales data came out today and pushed GBP/USD upwards, allowing GBP/USD to regain its recent losses. If it manages to break the 50-period moving average of 1.3900, the way up to the intersection of the 100-period moving average and the 38.2% Fibonacci retracement level of 1.3950 will be open. It seems that the bullish potential is really strong, so we may expect a further rising. The breakout above 1.3950 will lead the pair to the psychological mark of 1.4000. Support levels are at the intraday low of 1.3800 and the next round number of 1.3750.
Follow the Bank of England's statement this Thursday at 14:00 MT time! To get ready for this event, read our article "Will the GBP stay steady?"
