GBP/USD Forecast: Nice comeback hints at further gains in the docket
GBP/USD Current price: 1.3969
- Stabilizing government bond yields took its toll on the greenback.
- The UK Markit Services PMI is foreseen at 38.8 in February, down from 49.7.
- GBP/USD is poised to recover the 1.4000 threshold in the near-term.
The GBP/USD pair bottomed this Tuesday at 1.3856, recovering afterwards to close the day with gains in the 1.3970 price zone. The advance was the result of decreased dollar’s demand as government bond yields held within familiar levels for a second consecutive day. The UK macroeconomic calendar had nothing relevant to offer, as the country published the February Nationwide Price Index, which rose 6.9% YoY.
On Wednesday, the UK will release the January BRC Shop Price Index, previously at -2.2% YoY. Markit will unveil the February Services PMI, foreseen at 38.8 from 49.7 in January. Finally, UK finance minister Rishi Sunak will present the Budget report. Market talks that, while he would announce more support for business and households, he will also add some tax increases.
GBP/USD short-term technical outlook
The GBP/USD pair is up, quickly shaking off the bearish potential. The 4-hour chart shows that the price has recovered above all of its moving averages, although the 20 SMA maintains a strong bearish slope. Technical indicators recovered from oversold readings, turning flat within neutral levels. As long as it holds above 1.3930, the pair has room to extend its advance, with a steeper advance expected on a break above 1.4000.
Support levels: 1.3930 1.3880 1.3830
Resistance levels: 1.4000 1.4045 1.4090
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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.
