GBP/USD Forecast: Tensions mount on post-Brexit rules for financial services

Valeria Bednarik FXStreet

GBP/USD Current price: 1.4045

BOE Governor Bailey stated that low rates are not going to change “markedly.”
Tensions mount with the EU on post-Brexit rules for financial services.
GBP/USD is poised to challenge the 1.4000 threshold on the persistent dollar’s strength.

The GBP/USD pair extended its weekly decline to 1.4005 on the back of the persistent dollar’s demand, trimming most of its early losses ahead of the close to settle around 1.4040. The UK had a scarce macroeconomic calendar, as it only published the April RICS Housing Price Balance, which rose 75%, much better than the 62% expected.

Bank of England Governor Andrew Bailey participated in an online event. Among other things, he said that he does not think the situation with low interest rates is going to change markedly, also noting that there are no prospects for an agreement with the EU on post-Brexit equivalence rules for financial services. The deal is being blocked by France amid persistent tensions around fisheries. The UK won’t publish macroeconomic figures on Friday.

GBP/USD short-term technical outlook

The GBP/USD pair is poised to extend its slide in the near-term. The 4-hour chart shows that the pair has extended its slump far below a now bearish 20 SMA, while technical indicators keep heading south within negative levels. The longer moving averages remain directionless, well below the current level. The pair will likely accelerate its decline on a break below the 1.4000 figure, the immediate support level.

Support levels: 1.4000 1.3955 1.3910

Resistance levels: 1.4065 1.4120 1.4170

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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