GBP/USD Forecast: Bears likely to maintain the pressure

GBP/USD Current price: 1.3708

• Concerns related to the AstraZeneca vaccine and Brexit are hitting the pound.
• The UK macroeconomic calendar will remain light until next Tuesday.
• GBP/USD is poised to extend its decline towards the 1.3500 price zone.

The GBP/USD pair fell on Friday to 1.3669, its lowest since March 25, but managed to close the day in the 1.3700 price zone, sharply down for the week. As it happened ever since April started, pound weakness seems to be directly linked with the AstraZeneca coronavirus vaccine issues. The UK vaccine rollout with the shot was considered successful until concerns related to blood clots arose, leading to a slowing pace of vaccination.

Another factor weighing on sterling is the effects of Brexit in Northern Ireland. The protocol agreed after the UK’s departure from the Union has resulted in trade barriers between Britain and Northern Ireland. Unionist riots have been hitting the area since late March, escalating as time goes by.

Data wise, the UK published on Friday, March Halifax House Prices, which were up 6.5% in the three months to March. The country won’t publish macroeconomic data this Monday.

GBP/USD short-term technical outlook

From a technical point of view, the GBP/USD pair is at risk of falling further. The daily chart shows that the pair keeps developing below a bearish 20 DMA, while on Friday, it bottomed around a bullish 100 DMA. Technical indicators remain within negative levels and heading lower. In the near-term, and according to the 4-hour chart, the pair is well below all of its moving averages, with the 20 SMA heading firmly lower below the larger ones. Technical indicators diverge, with the Momentum advancing and the RSI heading south, both within negative levels. Still, a break below 1.3665 should lead to a new leg south towards the 1.3500 price zone.

 Support levels: 1.3665 1.3620 1.3570

Resistance levels: 1.3750 1.3790 1.335  

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