GBP/USD Forecast: Cable is not Kane, why sterling is unlikely to benefit from a rebound

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.