GBP/USD Forecast: Recovery stalling at a critical Fibonacci level
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get all exclusive analysis, access our analysis and get Gold and signals alerts
Elevate your trading Journey.
UPGRADEGBP/USD Current price: 1.3728
- The August UK August Markit PMIs came in mixed, decelerating from July’s final readings.
- Demand for high-yielding assets benefited the pound, despite discouraging UK data.
- GBP/USD has room to extend its gains once it clearly breaks above 1.3730.
The British Pound was among the most benefited currencies from the broad dollar’s weakness, with GBP/USD recovering up to 1.3732 and finishing the day nearby. Buyers ignored mixed UK data, as the August Markit Manufacturing PMI printed 60.1 while the services Index came in at 55.5, the latter missing expectations and well below the previous one.
The solid performance of Wall Street was attributed to concerns related to the spread of the Delta variant in the US, suggesting the Federal Reserve would not be able to trim facilities in the near term. Softer than anticipated data reinforced the idea, keeping equities afloat and the greenback under pressure. The UK macroeconomic calendar has nothing relevant to offer this week.
GBP/USD short-term technical outlook
The GBP/USD pair trades a few pips below the 61.8% retracement of its July rally at 1.3730, the immediate resistance level. The near-term is mildly bullish, as the pair has moved well above a still bearish 20 SMA, although still well below bearish longer ones. Meanwhile, technical indicators have crossed into positive territory but quickly lost bullish strength. A clear break above the mentioned Fibonacci resistance level should open the door for a steeper recovery.
Support levels: 1.3675 1.3620 1.3560
Resistance levels: 1.3730 1.3780 1.3825
GBP/USD Current price: 1.3728
- The August UK August Markit PMIs came in mixed, decelerating from July’s final readings.
- Demand for high-yielding assets benefited the pound, despite discouraging UK data.
- GBP/USD has room to extend its gains once it clearly breaks above 1.3730.
The British Pound was among the most benefited currencies from the broad dollar’s weakness, with GBP/USD recovering up to 1.3732 and finishing the day nearby. Buyers ignored mixed UK data, as the August Markit Manufacturing PMI printed 60.1 while the services Index came in at 55.5, the latter missing expectations and well below the previous one.
The solid performance of Wall Street was attributed to concerns related to the spread of the Delta variant in the US, suggesting the Federal Reserve would not be able to trim facilities in the near term. Softer than anticipated data reinforced the idea, keeping equities afloat and the greenback under pressure. The UK macroeconomic calendar has nothing relevant to offer this week.
GBP/USD short-term technical outlook
The GBP/USD pair trades a few pips below the 61.8% retracement of its July rally at 1.3730, the immediate resistance level. The near-term is mildly bullish, as the pair has moved well above a still bearish 20 SMA, although still well below bearish longer ones. Meanwhile, technical indicators have crossed into positive territory but quickly lost bullish strength. A clear break above the mentioned Fibonacci resistance level should open the door for a steeper recovery.
Support levels: 1.3675 1.3620 1.3560
Resistance levels: 1.3730 1.3780 1.3825
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.