GBP/USD analysis: 1.4000 a tough bone to break

GBP/USD Current price: 1.3989

  • Chancellor Hammond presented an encouraging mid-term budget statement.
  • Dollar's broad weakness helped lift the Pound to its highest in over two weeks.

The GBP/USD pair flirted with the 1.4000 figure, as broad dollar's weakness coupled with a speech from UK Chancellor of the Exchequer Phillip Hammond, who presented the half-yearly economic update on the economy. Growth forecast has been upgraded to 1.5% for this year, while deficit expectations have been revised lower. The statement also included an estimate of the Brexit divorce bill of £37.1bn, which is below market's estimates and therefore positive for the Pound. There are no UK events scheduled for this Wednesday. Technically, the pair is developing inside an ascendant channel, having pared gains near the roof of the figure, but holding nearby, which leans the scale toward the upside for the upcoming sessions. In the 4 hours chart, the pair settled well above its moving averages, which still lack clear directional strength. The RSI indicator reached overbought territory before losing upward strength, while the Momentum retreats within positive territory, suggesting that speculative interest is not ready to push it above 1.4000, at least for now. Nevertheless, stronger gains are likely on a break above it, as the figure converges with the roof of the channel.  

Support levels: 1.3960 1.3920 1.3880

Resistance levels: 1.4000 1.4040 1.4085

View Live Chart for the GBP/USD

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