GBP/USD Forecast: Reopening at doubt amid resurgent covid cases

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3853

UK inflation surged to 2.5% YoY in June, although producer prices were down.
The UK reported over 42,300 new coronavirus cases and 49 new deaths.
GBP/USD neutral in the near-term and at risk of falling further.

The GBP/USD pair peaked at 1.3891, retreating afterwards to settle in the 1.3860 price zone. The pair eased from tops despite the broad dollar’s weakness, as mixed UK data and coronavirus-related concerns undermined demand for the pound. Early in the day, the country published June inflation figures, with the Consumer Price Index increasing to 2.5% YoY. Producer Prices in the same month were down, while the Retail Price Index was up 3.9% in the same period.

Meanwhile, the UK reported over 42,300 new coronavirus cases and 49 new deaths. Prime Minister Boris Johnson is under fresh pressure from different sectors to keep the mandatory use of masks in closed spaces, as the government plans to lift most restrictions next Monday. On Thursday, the UK will publish its monthly employment figures. The ILO Unemployment rate is expected to remain steady at 4.7% in the three months to May. The Claimant Count Change is expected at -32.5K, while wages are foreseen up in June.

GBP/USD short-term technical outlook

The GBP/USD pair is technically neutral, although the risk skews to the downside. The 4-hour chart shows that the price converges with directionless 20 and 100 SMAs, while the 200 SMA maintains its bearish slope well above the current level. However, technical indicators lost directional strength around their midlines, indicating absent buying interest.

Support levels: 1.3790 1.3740 1.3685

Resistance levels: 1.3940 1.3990 1.4035

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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