GBP/USD Forecast: Bulls are not ready to challenge 1.4000

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3947

Tensions between the UK and the EU spurred concerns among GBP traders.
Risk-related sentiment led the way throughout the FX board.
GBP/USD eased from intraday highs, could extend its decline once below 1.3930.

The GBP/USD pair peaked at 1.3976, its highest for the week, but trimmed intraday gains and finished the day unchanged around 1.3940, as the dollar recovered ground during US trading hours. The pound benefited from Asian and European equities’ advances backing demand for high-yielding assets.

However, and after the EU Parliament ratified the Brexit trade deal, the market turned its eyes on the persistent tensions between the two economies. France complains about new fishing restrictions and menaced with reprisals, while UK shellfish and meat exports are struggling to send their goods to the EU, which turned its eyes elsewhere for such products. The UK did not publish relevant data, and the macroeconomic calendar will remain scarce on Friday, as the kingdom will only publish April Nationwide Housing Prices on Friday.

GBP/USD short-term technical outlook

From a technical point of view, the GBP/USD pair could extend its decline on a break below 1.3930, a Fibonacci level and the immediate support. The 4-hour chart, however, indicates that selling interest is limited. The pair keeps developing above its moving averages, with the 20 SMA maintaining its bullish strength. Technical indicators have eased within positive levels, with the Momentum still heading south but the RSI consolidating at around 55.

Support levels: 1.3930 1.3880 1.3835

Resistance levels: 1.3985 1.4020 1.4060

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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