- GBP/USD has been struggling as the dollar storms the board.
- Worries about the Delta variant may continue weighing on sterling.
- Thursday's four-hour chart is pointing to further losses for cable.
Harry Kane has taken England's football team to its first final since 1966 – taking advantage of a rebound seconds after he missed a penalty kick. Can cable also rebound from its lows? That seems a tall order, and not only because some British traders are probably tired after the seminfal excitement.
Doubts about the UK's planned reopening on July 19 have refused to let go as COVID-19 cases, hospitalizations and deaths continue rising. There are 11 days for Prime Minister Boris Johnson to change his mind in response to the Delta variant's rapid spread. The highly transmissible strain is spreading beyond Britain's borders, with a surge in Spain an uptick in the US.
The safe-haven dollar is holding onto the high ground on Thursday as a risk-averse tone takes over markets, aiming to break the winning streak of American stock markets. The S&P 500 hit yet another record high on Thursday, partially supported by the relatively dovish meeting minutes from the Federal Reserve.
The Fed seemed in no hurry to taper its bond-buying scheme, despite acknowledging higher inflation. More data is needed according to the protocols, a softer message than the impression that the mid-June meeting gave of a considerable hawkish tilt. Nevertheless, the mood on Thursday has worsened, and that favors the greenback.
FOMC minutes break no new ground on policy or bond timing
Weekly jobless claims are of interest later in the day but the daily report on Britain's COVID-19 situation and the market mood around the virus will likely have more impact on cable.
GBP/USD Technical Analysis
Pound/dollar has failed to recapture the 50 Simple Moving Average on the four-hour chart and momentum has slipped to the downside. These are bearish signs that point to further losses.
Support awaits at 1.3750, a swing low from earlier in the week, followed by 1.3730 and then by 1.3670, a level last seen in April.
Resistance is at 1.3785, a cushion from mid-June, and then by 1.3840, a swing high from earlier this week. Further above, 1.39 awaits GBP/USD bulls.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.