Pound is trading high taking benefit of US dollar weakness.  Just like all other major currency pairs, the cable also seem to benefited from the dollar weakness while also taking the advantage of BOE policymakers’ optimism. While doing so, the currency pair ignores recent Brexit-negative headlines as the greenback remains under pressure.

European Commission (EU) President Ursula von der Leyen remains firm on her Northern Ireland (NI) protocol commitment as all 27 members of the bloc has agreed to keep the term intact after the latest EU summit, which ended on early Tuesday in Asia. She said “It is important to reiterate that the protocol is the only possible solution to ensure peace and stability in Northern Ireland while protecting the integrity of the European Union single market.” “If we see problems today we should not forget that they do not come from the protocol but result from Brexit, that is the reason why the problems are there.”

The upbeat mood of UK scientists as well as the Bank of England (BOE) policymakers has helped the sterling. The British doctors confirmed finding Indian strain of the covid and backed the unlock plans. Bank of England policy makers pushed back against concerns that the U.K.’s rapid economic rebound from the pandemic will lead to a damaging wave of inflation.

Governor Andrew Bailey said in testimony to lawmakers Monday said that “The expected acceleration in prices this year will likely be temporary.” One of the member, said inflation will later return to the central bank’s 2% target as growth slows. While most economists agree, financial markets are betting that the central bank will raise interest rates as early as next year, implying that investors expect the recovery to gain enough momentum to force the BOE’s hand. Monday’s comments come after data showed U.K. inflation more than doubled in April to 1.5%

On the other hand, The US dollar remained under pressure, as expectations that the Fed might tighten monetary policy have largely dissipated. Several Fed policymakers have urged the Fed to discuss tapering QE in the coming months, but the market appears to have accepted the Fed’s message that inflation is transitory and that the US economy is still in need of massive stimulus through its QE programme.

GBP/USD 4 Hour Chart:

Support: 1.4120 (S1), 1.4085 (S2), 1.4059 (S3).

Resistance: 1.4181 (R1), 1.4207 (R2), 1.4241 (R3).

Amidst all the catalysts favoring the pound against the weaker dollar despite Brexit woes, we expect a bullish trend for GBP/USD.