GBP/USD analysis: improved UK data, ECB's possible tapering lift Pound

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3405

GBP/USD flirts with 1.3400 as UK data surprises to the upside, dollar gets in trouble.
No news in the UK this Wednesday could be good news for the Pound.

The GBP/USD pair attempted once again to regain the 1.3400 level on the back of better-than-expected UK data, but selling interest rejected it from 1.3392, the daily high. The British Pound got an early boost from the BRC like-for-like sales which climbed 2.8% in May, while the May Markit Services PMI jumped to 54.0 from the previous 52.8, its highest in three months. The pair eased following strong US data but bounced back on the back of speculation that the ECB is willing to discuss QE tapering, once again nearing the 1.3400 mark. This Wednesday, the UK calendar has nothing of relevance to offer, which may end up resulting beneficial for the Pound, given the current context of broad dollar's weakness. Technically, the pair keeps pushing higher, and while a definitive breakthrough is yet to be seen, readings in the short-term support additional gains ahead. The 4 hours chart shows that the pair met buyers around a mild bullish 20 SMA, while technical indicators have bounced again from their midlines, maintaining strong upward slopes and with the RSI indicator reaching fresh weekly highs, all of which supports additional gains, particularly on a break above 1.3420, now the immediate resistance.

Support levels: 1.3370 1.3335 1.3290

Resistance levels: 1.3420 1.3460 1.3500

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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