GBP/USD Forecast: Pound unattractive amid Brexit and coronavirus woes

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3763

The UK is suffering from food shortages amid disruptions in the supply chain.
Speculative interest paused dollar’s selling, but the greenback remains weak.
GBP/USD consolidates below 1.3800 and has a limited bullish scope.

The GBP/USD pair ended Monday unchanged in the 1.3760 price zone after spending the day within a tight 40 pips range. The pair was unable to attract speculative interest amid a local holiday and a scarce macroeconomic calendar. The pound remains unattractive amid concerns related to persistent tensions with the EU, the latest related to food shortages in the UK amid disruption in the supply chain. Another factor undermining demand for the British currency is the spread of the coronavirus Delta variant, which results in over 30K new cases per day.

The UK will publish this Tuesday, July money-related data, including monthly Mortgage Approvals, foreseen at 79K MoM from 81.3K in June.

GBP/USD short-term technical outlook

The GBP/USD pair maintains a neutral stance in the near term. The 4-hour chart shows that the price is trapped above a mildly bullish 20 and below a bearish 100 SMA, with the latter providing resistance around the 50% retracement of the July advance. The Momentum indicator bounced from around its midline, while the RSI indicator consolidates around 55, skewing the risk to the upside without confirming additional gains ahead.

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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