- GBP/USD has been struggling as the dollar storms the board.
- Worries about the Delta variant may continue weighing on sterling.
- Thursday's four-hour chart is pointing to further losses for cable.
Harry Kane has taken England's football team to its first final since 1966 – taking advantage of a rebound seconds after he missed a penalty kick. Can cable also rebound from its lows? That seems a tall order, and not only because some British traders are probably tired after the seminfal excitement.
Doubts about the UK's planned reopening on July 19 have refused to let go as COVID-19 cases, hospitalizations and deaths continue rising. There are 11 days for Prime Minister Boris Johnson to change his mind in response to the Delta variant's rapid spread. The highly transmissible strain is spreading beyond Britain's borders, with a surge in Spain an uptick in the US.
The safe-haven dollar is holding onto the high ground on Thursday as a risk-averse tone takes over markets, aiming to break the winning streak of American stock markets. The S&P 500 hit yet another record high on Thursday, partially supported by the relatively dovish meeting minutes from the Federal Reserve.
The Fed seemed in no hurry to taper its bond-buying scheme, despite acknowledging higher inflation. More data is needed according to the protocols, a softer message than the impression that the mid-June meeting gave of a considerable hawkish tilt. Nevertheless, the mood on Thursday has worsened, and that favors the greenback.
FOMC minutes break no new ground on policy or bond timing
Weekly jobless claims are of interest later in the day but the daily report on Britain's COVID-19 situation and the market mood around the virus will likely have more impact on cable.
GBP/USD Technical Analysis
Pound/dollar has failed to recapture the 50 Simple Moving Average on the four-hour chart and momentum has slipped to the downside. These are bearish signs that point to further losses.
Support awaits at 1.3750, a swing low from earlier in the week, followed by 1.3730 and then by 1.3670, a level last seen in April.
Resistance is at 1.3785, a cushion from mid-June, and then by 1.3840, a swing high from earlier this week. Further above, 1.39 awaits GBP/USD bulls.
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
EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.