Britain's rapid vaccination campaign and nationwide lockdown have yielded a sharp drop in COVID-19 infections, hospitalizations, and deaths, raising hopes for a quicker return to normality.
The promise of a slow exit from the lockdown is that it will allow vaccinating more people and also diminish the chances of having yet another shuttering of the economy.
GBP/USD is also weighed down by fresh dollar strength, stemming from higher US yields. Expectations of stronger growth perhaps even overheating due to stimulus is pushing investors away from US Treasuries. So far, the central bank has seen it is as a healthy sign of recovery.
Powell is set to testify before Congress on Tuesday and his prepared remarks may be released already on Monday. If he reiterates the bank's willingness to do more and opens the door to expanded bond-buying, yields could fall and the dollar could rise. While he is unlikely to commit to new and imminent stimulus, Powell's commitment to do more may provide the next leg higher for GBP/USD.
Pound/dollar continues benefiting from upside momentum on the four-hour chart and also trades well above the 50, 100 and 200 Simple Moving Averages. The recent dip pushed the Relative Strength Index away from the 70 level thus further out from overbought conditions.
The fresh multi-year high of 1.4052 is the first resistance level to watch. It is followed by 1.4145, 1.4255 and 1.4370, all date back to 2018.
Support awaits at the daily low of 1.3980, then by 1.3950 and 1.39, which served as stepping stones on the way up.