GBP/USD Forecast: In search of a fresh catalyst

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3777

UK data was generally encouraging but fell short of boosting the pound.
The broad dollar’s weakness maintains GBP/USD afloat in the near term.
GBP/USD needs to firm up above the 1.3800 level to be able to extend its gains.

The GBP/USD pair posted a modest intraday advance this Wednesday, holding below the 1.3800 threshold. The pair topped at 1.3798 and currently trades in the 1.3780 price zone, backed by the broad dollar’s weakness and encouraging UK data. The UK reported August Nationwide Housing Prices, which rose 11% YoY, beating expectations.

The August Markit Manufacturing PMI was upwardly revised to 60.3, despite “UK manufacturers continued to face rising constraints caused by supply chain issues,” according to the official report. Finally, the UK’s BRC Shop Price Index contracted 0.8% in August, better than the previous -1.2%. The country won’t publish macroeconomic figures on Thursday.

GBP/USD short-term technical outlook

The daily chart for the GBP/USD pair shows that the pair topped around a mildly bullish 200 SMA for a second consecutive day, as the price struggles around a bearish 20 SMA. In the same chart, technical indicators have advanced further within negative levels and are currently challenging their midlines, suggesting an upcoming advance without confirming it.

In the nearer term and according to the 4-hour chart, the pair has limited bullish potential. The pair keeps trading below a flat 200 SMA, providing resistance around 1.3800, although the 20 SMA is crossing above the 100 SMA, both below the current level. The Momentum advances within positive levels but stands below its previous highs, while the RSI is flat at around 57, indicating an absence of buying interest.

Support levels: 1.3725 1.3680 1.3630

Resistance levels: 1.3800 1.3845 1.3890

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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