- GBP/USD looks vulnerable as the UK is set for the ‘Freedom Day’.
- Symmetrical triangle breakdown on the 1D chart calls for a test of 200-DMA.
- The UK covid cases soar the most in the world, risk-aversion lifts the USD.
GBP/USD is wallowing in weekly lows around 1.3750, as the sellers remain in control amid a tepid market mood heading into the European trading this Monday.
Investors remain worried about the recent surge in coronavirus cases globally, in light of the highly contagious Delta covid strain, which has prompted the withdrawal of inflows from the riskier assets while benefiting the safe-haven US dollar.
Meanwhile, the resurgence of the covid infections in the UK, as the nation gears up for a big reopening today – the ‘Freedom Day’, weighs negatively on the pound. Amidst a potential removal of most social curbs, the Kingdom added over 54,000 new cases Saturday and over 47,600 on Sunday.
The rising covid cases coupled with Prime Minister Boris Johnson’s row over a row over self-isolation alongside the Finance Minister Rishi Sunak keeps the GBP bulls at bay. The leaders held meetings with Health Secretary Sajid Javid, who Saturday announced he had tested positive for COVID-19.
All eyes remain on the fresh covid-related developments on the ‘Freedom Day’ while the cable continues to remain on the back foot amid a lack of first-tier macro news from both sides of the Atlantic.
GBP/USD technical outlook
GBP/USD confirmed a downside breakout from a symmetrical triangle on the daily chart last Friday.
The cable extends the previous losses on Monday, heading for a test of the upward-sloping 200-Daily Moving Average (DMA) at 1.3700.
Immediate support is seen at the July 8 low of 1.3742, which now seems to be under attack.
The 14-day Relative Strength Index (RSI) is looking southward below the midline, currently at 38.60, allowing room for more declines.
GBP/USD daily chart
Alternatively, for a meaningful recovery, the bulls need a daily closing above the triangle support now resistance at 1.3789.
The next upside target for the GBP bulls is envisioned at the mildly bearish 21-DMA at 1.3849.
All in all, GBP/USD’s path of least resistance appears to the downside.
GBP/USD additional levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD remains confined in a range below 0.6300
AUD/USD extends its consolidative price move below the 0.6300 mark during the Asian session on Thursday amid uncertainty over US President Donald Trump's tariff plans. A positive risk tone and Fed rate cut bets cap a modest USD bounce from the monthly low, lending support to the currency pair.
USD/JPY edges lower after Japan trade data; focus remains glued to BoJ
USD/JPY struggles to capitalize on the overnight strong move up and attracts some sellers during the Asian session on Thursday following the better-than-expected release of Trade Balance data from Japan. Apart from this, the prospects for an imminent BoJ rate hike benefit the JPY, though the risk-on mood could cap gains.
Gold price consolidates near three-month top; bullish potential intact
Gold price holds steady below its highest level since November and remains on track to prolong over a one-month-old uptrend. The uncertainty over US President Donald Trump's trade policies and Fed rate cut bets might continue to underpin the XAU/USD.
Toncoin price flashes 45% rally signal as Trump’s Ross Ulbricht pardon lifts Privacy coins
Toncoin price crossed $5.3 on Wednesday, driven by bullish sentiment after President Donald Trump pardoned early-Bitcoiner Ross Ulbricht. On-chain analysis shows that whale investors had been on a 10-day buying spree before the latest bullish news events surrounding Privacy-focused coins.
Netflix posts record quarter, as Trump talks tariffs on China
There has been a positive tone to risk this week, as the market digests Trump 2.0. However, Trump is not the only show in town. Earnings reports are also a key driver of stock indices, and the news is good.
Trusted Broker Reviews for Smarter Trading
VERIFIED Discover in-depth reviews of reliable brokers. Compare features like spreads, leverage, and platforms. Find the perfect fit for your trading style, from CFDs to Forex pairs like EUR/USD and Gold.