GBP/USD Forecast: Brexit and covid still affecting the pound

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3504

The post-Brexit deal is under scrutiny amid multiple unsolved issues.
The UK reported over 40K new coronavirus contagions in one day, a record high.
GBP/USD is technically neutral, buying interest seems quite limited.

A weaker dollar maintains GBP/USD afloat this Tuesday, with the pair trading around the 1.3500 level. The sterling lost momentum despite the UK and the EU were able to clinch a post-Brexit deal, as investors scrutinize the document, which shows that multiple issues remain unsolved. The market’s reaction is limited by thin holidays trading in a shortened week with an empty macroeconomic calendar.

The latest coronavirus developments in the UK are also capping sterling. The country reported over 40K new COVID-19 cases in one day this week, the largest increase on record, despite strict lockdown measures are being applied throughout the kingdom.

GBP/USD short-term technical outlook

The GBP/USD pair is trading higher in range, but the near-term technical picture indicates that bullish intentions are few. In the 4-hour chart, a bullish 20 SMA offers dynamic resistance in the 1.3520 price zone, while the longer moving averages head nowhere below the current level. The Momentum indicator is directionless within negative levels, while the RSI indicator hovers around its midline, falling short of signaling a new leg north.

Support levels: 1.3465 1.3420 1.3360

Resistance levels: 1.3520 1.3550 1.3595

View Live Chart for the GBP/USD

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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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