GBP/USD Forecast: Selling on spikes beyond 1.3800

Valeria Bednarik FXStreet

G
BP/USD Current price: 1.3763

The Bank of England is in no rush of changing its current monetary policy.
UK’s reopening as the covid situation improves, provides support to the pound.
GBP/USD is technically neutral in the near-term but with increased bearish potential.

The British Pound started the day with a strong footing, with GBP/USD jumping to 1.3846 during the European session, although later trimming intraday gains to close the day pretty much unchanged in the 1.3760 price zone. There was no particular catalyst behind’s the pound advance, although easing tensions between the UK and the EU and the kingdom’s reopening are making the pound more attractive.

The UK published some money-related data this Monday, with February Consumer Credit printing at £-1.246 billion, better than the £-1.25 billion expected. Mortgage Approvals in the same month missed expectations, increasing by 87.7K. Also, BOE’s policymaker Gertjan Vlieghe hit the wires and cooled expectations of a change in the central bank monetary policy in the near term. "A couple of quarters of strong growth doesn't mean the B0E should change monetary stance or step on brakes," Vlieghe said. The UK won’t publish macroeconomic data on Tuesday.

GBP/USD short-term technical outlook

The GBP/USD pair offers a neutral stance in the near-term. The 4-hour chart shows that the pair remains above its 20 SMA but that the pair retreated after nearing the 100 SMA. Technical indicators ease, the Momentum holding above its midline but the RSI already within negative levels, increasing the bearish potential. Additional declines could be expected on a break below the 1.3750 price zone.

Support levels: 1.3745 1.3690 1.3650

Resistance levels: 1.3825 1.3860 1.3910

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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