GBP/USD: Key DMAs test up-moves past 1.3900
GBP/USD seesaws around 1.3920-15 amid the initial Asian session on Wednesday. In doing so, the cable takes rounds to 50.0% Fibonacci retracement (Fibo.) of June–July downturn while keeping the previous day’s rebound from the resistance-turned-support line from June 01.
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The near-term picture is neutral for GBP/USD. The 4-hour chart shows that, despite an intraday advance, the pair has been unable to settle above a mildly bearish 20 SMA. Technical indicators hover around their midlines with divergent directional strength, indicating the lack of directional momentum. The pair would need to firm up above 1.3940, the immediate resistance level, to be able to extend its gains.
Support levels: 1.3865 1.3820 1.3770
Resistance levels: 1.3940 1.3985 1.3420
The GBP/USD pair trades a handful of pips above the 1.3900 level, posting a modest intraday advance. The pair seesawed between gains and losses, fluctuating alongside the market’s sentiment but holding on to a limited intraday range amid the absence of a valid catalyst. Market participants await the Bank of England monetary policy announcement, scheduled for August 5. The central bank may warn about the risk of tightening too early, somehow denting demand for the pound in advance.
Data-wise, the UK macroeconomic calendar had nothing to offer on Tuesday, but over the next 24 hours, Markit will publish the final reading of the country’s July Services PMI, previously estimated at 57.8.
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