GBP/USD faces resistance near 1.3930, holds to modest weekly gains
- Pound still weak across the board after the dovish hold from the Bank of England.
- GBP/USD up for the week, still under the 20-WMA.
The GBP/USD trimmed losses during Friday's American session, boosted by a decline of the US dollar across the board. Cable rose back above 1.3900 and climbed to 1.3930. It continues to move sideways, with the pound being the weakest among the G10 space.
US data not positive for the greenback
Economic data from the US did not help the greenback. The income and spending report showed no major surprises. The Core PCE rose to 3.4%, the highest level since 1991, as expected. Later then University of Michigan Consumer Sentiment Index came in below expectations at 85.5 in June-
The DXY is losing 0.15%, trading at 91.65, after finding support above 91.50. The weakness seen earlier in the US dollar is easing near the end of the week.
Pound among the worst
The tone of the Bank of England on Thursday, when, as expected, introduced no policy changes, was on the dovish side and weakened the pound. “Despite the dovish hold, the short sterling futures strip still suggests some odds of the first hike in Q4 2021, rising significantly in Q1 and priced by Q2 2022”, said analyst at Brown Brothers Harriman.
The GBP/USD is about to end the week higher, recovering a fraction of the previous week’s losses. It peaked near 1.4000 on Wednesday before starting to move lower. So far, the area around 1.3890 capped the latest decline. In the weekly chart, cable has been unable to recover the 20-SMA that stands at 1.3930. The bias in the very short-term points to the downside while under 1.3930/35.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
