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

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

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.

EUR/USD holds losses near 1.1850 with holidays keeping trade muted

EUR/USD opens the week on a softer note, trading near 1.1860 during the Asian session on Monday. Activity is likely to remain muted, with United States markets closed for the Presidents’ Day holiday, while Mainland China is also shut for the week-long Lunar New Year break.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold holds above $5,000 as bears seem hesitant amid Fed rate cut bets

Gold edges lower at the start of a new week, though it defends the $5,000 psychological mark through the Asian session. The underlying bullish sentiment is seen acting as a headwind for the bullion. However, bets for more rate cuts by the Fed, bolstered by Friday's softer US CPI, keep the US Dollar bulls on the defensive and continue to support the non-yielding yellow metal as the focus now shifts to FOMC Minutes on Wednesday.

Week ahead: Data blitz, Fed Minutes and RBNZ decision in the spotlight

The US jobs report for January, which was delayed slightly, didn’t do the dovish Fed bets any favours, as expectations of a soft print did not materialize, confounding the raft of weak job indicators seen in the prior week.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.