GBP/USD Forecast: BOE’s Saunders hints on tapering

GBP/USD Current price: 1.3818

• BOE’s Saunders said policymakers likely to discuss tapering in their upcoming meetings.
• The UK reported a record of over 48,500 new coronavirus contagions in 24 hours.
• GBP/USD is technically bearish and could reach fresh monthly lows.

The GBP/USD pair peaked at 1.3898 during London trading hours, as the pound got a boost from comments from Michael Saunders, policymaker from the Bank of England. He said that during the upcoming months, they would discuss whether to curtail the current assets purchase program and/or take further policy action next year. He clarified that if the “bank rate does rise in the next year or so, it is likely that any rise would be relatively limited.” The pair changed course afterwards as the dollar gathered strength on the back of a souring market’s mood. Stocks edged lower in Europe, accelerating their slumps ahead of London’s close. Wall Street also suffered but ended the day mixed.

Meanwhile, the UK reported a record of over 48,500 new coronavirus contagions in the past 24 hours, although only four persons were admitted to ICU. Roughly 69% of the UK’s population has received at least one dose of a coronavirus vaccine, while around 53% have received two shots. The UK macroeconomic calendar will remain empty on Friday.

GBP/USD short-term technical outlook

The GBP/USD pair trades near the 1.3800 level, bearish in the near-term. The 4-hour chart shows that the pair briefly spiked above its 20 and 100 SMAs, both converging around 1.3845. The Momentum indicator turned marginally higher within negative levels, but the RSI indicator accelerated its slump and stands around weekly lows, anticipating a steeper decline ahead, mainly on a clear break through the 1.3790 level.

Support levels: 1.3790 1.3740 1.3685

Resistance levels: 1.3945 1.3990 1.4035

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