GBP/USD Forecast: Pressure mounts on the pound

Valeria Bednarik FXStreet

GBP/USD Current price: 1.4107

UK Prime Minister Johnson confirmed lockdown measures extend to July 19.
The UK will publish employment-related data on Tuesday.
GBP/USD could fall towards the 1.4000 figure and beyond.

The GBP/USD pair fell to a fresh two-month low of 1.4069 amid expectations the UK government will delay the final stage of easing lockdown measures, from June 21 to July 19, to enable vaccine rollout. Prime Minister Boris Johnson addressed the nation and confirmed the new date. The pair trimmed losses and turned positive with Wall Street’s opening, ending the day just above the 1.4100 threshold.

Comments from BOE’s Governor Andrew Bailey also weighed on the pound, as he said that the size of the central bank’s balance sheet would be a major issue over the next five years. On Tuesday, the UK will publish its latest employment figures. The ILO Unemployment Rate for the three months to April is foreseen at 4.7%, below the previous 4.8%. The May Claimant Count Change is seen up by 25K, following the previous -15.1K reading.

GBP/USD short-term technical outlook

The GBP/USD pair is still at risk of falling further. The 4-hour chart shows that buying interest is aligned around a mildly bullish 200 SMA, but also that the pair was unable to advance beyond a bearish 20 SMA. The Momentum indicator gyrated south, currently within negative levels, while the RSI consolidates around 44, all of which favor a bearish continuation without confirming it yet.

Support levels: 1.4070 1.4020 1.3970

Resistance levels: 1.4130 1.4180 1.4225

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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