GBP/USD Forecast: Poised to challenge bears’ determination at 1.4000

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3960

UK´s businesses output held in expansion territory in June, according to Markit.
The Bank of England will announce its latest decision on monetary policy on Thursday.
GBP/USD could storm through the 1.4000 threshold on a hawkish BOE.

The GBP/USD pair hit 1.4000 ahead of Wall Street’s opening, retreating afterwards to end the day with modest gains around 1.3960. The pair surged amid the prevalent optimism, with high-yielding assets advancing against the greenback. However, the positive mood receded after the release of softer-than-expected US macroeconomic figures.

Adding to the early advance, the preliminary estimate of the UK Markit Manufacturing PMI improved to 64.2 in June from 64 previously, while the services index printed at 61.7, missing the expected 62.8 but still indicating economic expansion.

On Thursday, the Bank of England will announce its latest decision on monetary policy. The central bank is expected to maintain its current policy unchanged, although investors are hopping from some clues on tightening. MPCs have hinted at a rate hike for 2022, although without much detail. The BOE won’t publish fresh macroeconomic projections this time.

GBP/USD short-term technical outlook

The GBP/USD pair has partially lost its bullish potential, but in the near-term, the risk is still skewed to the upside. The 4-hour chart shows that the pair is developing above a bullish 20 SMA but below bearish longer ones. The Momentum indicator retreats within positive levels while the RSI indicator consolidates around 54. Bulls will likely accelerate buying once the pair breaks above 1.4010, the immediate resistance level.

Support levels: 1.3935 1.3890 1.3850

Resistance levels: 1.4010 1.4060 1.4120

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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