GBP/USD Forecast: Bulls may have better chances if the recovery extends beyond 1.3950

GBP/USD Current price: 1.3895

• UK’s Chief Medical Officer Chris Whitty warned that coronavirus cases could resurge.
• GBP/USD direction continues to depend on US Treasury yields and the dollar.

The GBP/USD pair reached an intraday high of 1.3925, recovering on the easing dollar’s demand. The pair settled in the 13890 price zone, despite the positive tone of equities, as global indexes closed in the green. The pair’s direction kept depending solely on the US as the UK macroeconomic calendar remains scarce, with the focus on coronavirus vaccines roll-out. The country is among the ones that have vaccinated the most of its population, with roughly 34% of the UK inhabitants having received at least one shot. Nevertheless, the number of new contagions remains above 5,000 per day, and while improving, it’s still high.

England’s Chief Medical Officer Chris Whitty warned that Britain would see a resurgence of coronavirus cases, even with a successful vaccination campaign. “The ratio of cases to deaths will go right down as a result of vaccination, but not right down to zero, unfortunately,” he said.

GBP/USD short-term technical outlook

The GBP/USD pair recovered within range, as is technically neutral in the near-term. In the 4-hour chart, technical indicators recovered above their midlines but lost directional strength, with the RSI currently neutral around 52. Meanwhile, the pair traded between its 100 and 200 SMA, which remain flat. The 20 SMA heads lower below the current level, skewing the risk to the downside. Bulls may have better chances if the pair recovers above the 1.3950 resistance level.

Support levels: 1.3770 1.3725 1.3680

Resistance levels: 1.3905 1.3950 1.4000

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