GBP/USD Forecast: Under pressure amid coronavirus-related concerns

Valeria Bednarik FXStreet

GBP/USD Current price: 1.4112

BOE’s Andy Haldane warned about rising inflationary pressures, called on cutting back stimulus.
UK new coronavirus cases at their highest since mid-February amid Delta strain.
GBP/USD is at risk of extending its decline as it’s pressuring the 1.4110 support.

The GBP/USD pair neared the 1.4200 figure but took a turn to the worse during the American session, now trading a few pips above the 1.4100 level, with the decline exacerbated by coronavirus-related concerns. UK epidemiologist Neil Ferguson said that the UK could see a third wave comparable to the second one in terms of hospitalizations, if not deaths. The new Delta strain, currently the dominant in the UK, is believed to be 60% more transmissible than the Alpha one. The UK reported over 7,500 new cases in the past 24 hours, the biggest one-day increase since February 17.

Earlier in the day, Bank of England Chief Economist Andy Haldane warned about rising inflationary pressures and called on cutting back stimulus amid a roaring economy. The UK macroeconomic calendar had nothing to offer this Wednesday. On Thursday, the country will publish the May RICS Housing Price Balance.

GBP/USD short-term technical outlook

The GBP/USD pair is at risk of falling further, as it consolidates losses around 1.4115. The near-term picture is bearish, as the pair was unable to advance beyond its 20 and 100 SMAs, both converging around 1.4165. Technical indicators head south within negative levels, with the Momentum heading firmly lower and the RSI decelerating at around 41. A test of the 1.4000 threshold is on the card for this Thursday, while sellers will likely keep defending the 1.4200 price zone.

Support levels: 1.4110 1.4070 1.4020

Resistance levels: 1.4165 1.4210 1.4250

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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