GBP/USD Forecast: Pressuring a four-month high

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2944

July CBI Survey unexpectedly surged to 4% from -37% in the previous month.
UK PM Johnson warned of a second wave of coronavirus hitting Europe.
GBP/USD bullish around 1.2950 and poised to challenge the 1.3000 threshold.

The Sterling continued to benefit from the broad dollar’s weakness, with GBP/USD reaching 1.2952, its highest in four months. The UK currency found additional support in the July CBI Distributive Trade Survey on realized sales unexpectedly jumped to 4% from -37% and largely surpassing the expected -25%. , CBI Chief Economist, Rain Newton-Smith, however, warned that “the re-opening of non-essential retail was a vital step towards recovery but isn’t a cure-all,” as he added that for some businesses, the picture “remains bleak.”

Meanwhile, UK PM Johnson warned of a second wave of coronavirus hitting Europe, adding that he won’t hesitate to take decisive action to prevent the UK from suffering from another outbreak. His comments came after the UK imposed a two-week quarantine to all those travellers arriving from Spain. This Wednesday, the UK will publish the BCR Shop Price Index for June, previously at -1.6%, and June money data.

GBP/USD short-term technical outlook

The GBP/USD pair is trading a few pips below the mentioned high and could extend its gains during the upcoming sessions. The 4-hour chart shows that the pair is developing well above a bullish 20 SMA, which continues to advance above the larger ones. Technical indicators have lost their bullish strength but hold near their intraday highs in overbought territory, indicating the absence of selling interest.

Support levels: 1.2905 1.2860 1.2810

Resistance levels: 1.2960 1.3000 1.3050

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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