GBP/USD Forecast: Bears likely to maintain the pressure

Valeria Bednarik FXStreet

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

View Live Chart for the GBP/USD

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD faces next resistance near 1.1930

EUR/USD continues to build on its recovery in the latter part of Wednesday’s session, with upside momentum accelerating as the pair retargets the key 1.1900 barrier amid a further loss of traction in the US Dollar. Attention now shifts squarely to the US data docket, with labour market figures and the always influential CPI releases due on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.