GBP/USD Forecast: Holding by a thread, bearish

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3803

The American dollar consolidates near its weekly high against most major rivals.
The US August Michigan Consumer Sentiment Index is expected at 81.2.
GBP/USD could accelerate its slump once below 1.3790, the immediate support level.

The GBP/USD pair consolidates at the lower end of its weekly range, trading around the 1.3800 level. Major pairs had been lifeless as volatility plummeted following the release of US July inflation, which spur some temporal and limited dollar’s weakness. However, the American currency has recovered most of the ground shed then and trades near weekly highs across the FX board. The pound is its weakest rival, while safe-haven JPY and Gold are the strongest.

Mixed UK data released on Thursday fell short of boosting sterling, despite signs of a firmer economic comeback in the second quarter of the year. The country won’t publish macroeconomic data on Friday, while the US will release the preliminary estimate of the August Michigan Consumer Sentiment Index, expected at 81.2.

GBP/USD short-term technical outlook

The GBP/USD pair is technically bearish and could extend its decline heading into the weekend. The pair posted a lower low at 1.3790, the immediate support level. In the 4-hour chart, the pair develops below all of its moving averages, with the 20 SMA heading firmly south between the longer ones. Technical indicators are directionless but remain within negative levels, reflecting bears’ dominance.

Support levels: 1.3790 1.3755 1.3710

Resistance levels: 1.3865 1.3910 1.3960

View Live Chart for the GBP/USD

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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