FX.co ★ GBP/USD Hot Forecast for 22 February, 2021

• PM Johnson to unveil a four-stage plan to lift restrictions.
• Sterling remains bid but further gains may be slow and limited.

UK Prime Minister Boris Johnson will unveil his plan for a phased exit of the current covid-19 lockdown later in the day as UK coronavirus data starts to paint a more positive picture. PM Johnson will finalize his plans during the day with his ministers and speak to the country via a press conference at 19:00 GMT. The plans for gradual easing of strict measures add to positive sentiment.

Cable returns above the 1.40 mark and hits new 34-month high at 1.4052 after a brief dip to 1.3980 in the early European trading on Monday. Bulls attempt to sustain a breakout above the psychologically important level of 1.40 after registering a marginal close above the one from last Friday (the first close above 1.40 since mid-Apr 2018).

A clear breakout of the 1.40 psychological level would open the way for testing another significant barrier at 1.4050 monthly high,violation of which would further strengthen bullish stance.

Daily studies maintain strong bullish momentum, but overbought RSI and Stochastic warn of headwinds that may result in consolidation/ correction before bulls resume their trend. On the flip side, a breakthrough below 1.400 would open the gates to test 1.3950 previous resistance breakout point which coincides with the ascending trend-line support.