GBP/USD: Virus variants concerns to hobble sterling

GBP/USD is hovering above 1.41 as the pair tries to recover from the Fed's subtle hint of tapering bond buys. However, virus variants risk the UK's reopening and weigh on sterling, Yohay Elam, an Analyst at FXStreet, reports.

Freedom Day may be less free than anticipated

“The UK may dilute plans to relax COVID-19 rules on June 21 due to worries about the India variant. The new worries about delaying the reopening come despite reassurances that existing vaccines cope with the variant. UK Prime Minister Boris Johnson seemed calm about the matter, but Health Minister Matt Hancock's concerns may now take over. A limited reopening means less economic activity.” 

“Investors are reassessing the Federal Reserve's meeting minutes and their meaning on Thursday. It is essential to note that Federal Reserve Chair Jerome Powell and most of his colleagues support leaving the policy unchanged for some time and see the economy as having a ‘long way to go’.”  

“The daily low of 1.41 provides initial support. It is followed by 1.4075, 1.4050, and 1.4010.” 

“Some resistance is at the daily high of 1.4140, followed by 1.4160 and 1.4220, May's peak.”