- GBP/USD adds to recent gains and approaches 1.4000.
- Dollar weakness favours the rebound from the 1.3800 zone.
- UK flash Services PMI will take centre stage later on Wednesday.
The sterling appreciates for the third session in a row vs. the greenback and lifts GBP/USD to the area just shy of the psychological barrier at 1.4000 the figure.
Following the sharp selloff to the 1.3800 neighbourhood in the wake of the FOMC event and its impact on the risk complex, Cable managed to regain positive footing and already trades at shouting distance from the key 1.4000 barrier.
In the meantime, key drivers for the pair’s price action still remain on the pace of the economic recovery and the timing of the re-opening of the economy, all gauged vs. the progress of the pandemic.
While the BoE is expected to keep rates on hold for the foreseeable future, investors and the quid will closely follow further announcements regarding the pace of the bond-buying programme and any gradual shift to a more hawkish stance from the “Old Lady”.
Capping occasional bullish attempts, however, emerge omnipresent concerns surrounding Brexit.
Beyond 1.4000 there are minor hurdles at the 50-day and 20-day SMAs, at 1.4028 and 1.4080, respectively. Further north, there are no relevant resistance levels until the so far 2021 highs in the mid-1.4200s (June 1). If sellers regain control of the sentiment, recent lows in the 1.3800 area are forecast to hold the initial test.
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