GBP/USD Forecast: Struggling to extend gains beyond 1.3900

Valeria Bednarik FXStreet

GBP/USD Current price: 1.3907

Brexit-related headlines continue to spook pound buyers.
The UK macroeconomic calendar will remain empty for most of the week.
GBP/USD is marginally bullish in the near-term, needs to break above 1.3930.

The GBP/USD pair advanced on Monday to 1.3929, as risk appetite extended in the weekly opening. However, the pair retreated from the mentioned high as dismal EU and US data dented the market’s mood. The pair bottomed at 1.3865, bouncing modestly ahead of the close as US indexes moved off intraday lows. Major pairs moved on sentiment, with the greenback looking at equities for direction.

Meanwhile, Brexit-related news continue to hurt the pound. According to the Food and Drink Federation, UK exporters have lost more than £1.1bn since the start of the year. The exports of some dairy products decreased by 96%, while sales of chicken and beef fell by almost 80%. The UK’s macroeconomic calendar has little to offer this week and will remain empty on Tuesday.

GBP/USD short-term technical outlook

The GBP/USD pair currently trades at around the 1.3900 level, modestly bullish according to intraday technical readings. The 4-hour chart shows that the pair is struggling to advance beyond a flat 20 SMA, while it meets sellers at around the 23.6% retracement of its April advance. Technical indicators advance, crossing their midlines in positive levels, somehow supporting another leg north, mainly if the pair breaks above the mentioned daily high.

Support levels: 1.3880 1.3835 1.3795

Resistance levels: 1.3930 1.3985 1.4020

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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