GBP/USD Forecast: Grinding higher as hopes return

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3956

UK Health Minister confident the country can fully end lockdown on July 19.
Public Sector Net Borrowing in the UK contracted to £23.605 billion in May.
GBP/USD could extend its recovery toward the 1.4000 threshold.

The GBP/USD pair recovered from an intraday low of 1.3860 and hit a fresh weekly high of 1.3963, ending the American session a couple of pips below this last. The pound was supported by comments from the UK Health Minister Matt Hancock, who said covid-related data looks encouraging and suggests lockdown can fully end on July 19 as planned because a recent rise in cases is not resulting in deaths.

The country published May Public Sector Net Borrowing, which decreased to £23.605 billion. On Wednesday, Markit will publish the preliminary estimate of the UK June Manufacturing PMI, foreseen at 64 from 65.6 previously. The Services PMI for the same month is expected at 62.8 from 62.9 in May.

GBP/USD short-term technical outlook

The GBP/USD pair offers a neutral-to-bullish stance in the near-term. The 4-hour chart shows that technical indicators entered positive territory, with the Momentum maintaining its bullish potential but the RSI now consolidating around 52. The pair is above a directionless 20 SMA, at around 1.3885, while it remains below the longer ones, suggesting the ongoing advance may well be considered corrective. The pair could have better chances of an upward extension on a clear break above the 1.4010 price zone.

Support levels: 1.3890 1.3850 1.3805

Resistance levels: 1.3960 1.4010 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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