GBP/USD Forecast: Reality set to bite? Global tensions paint a gloomy picture

• GBP/USD has been remarkably holding its gains and shrugging off headwinds.
• US and UK relations with China, Brexit, coronavirus figures, all point lower.
• Thursday's four-hour chart is still positive for the currency pair.

No football for you – That is the message from Chinese broadcasters to their audiences as they discontinue showing Premier League matches across the world's second-largest economy.

That is the latest move in deteriorating Sino-British relations, which are mostly around Hong Kong. Britain canceled its extradition treaty with the city-state – and former colony – after China tightened its grip there. The UK also announced it will be phasing out Huawei's 5G equipment. 

Beijing is also clashing with Washington – or more precisely in Houston. The US announced the closure of the Chinese consulate in the Texan city, hiring that workers there were engaged in spying. President Donald Trump suggested that Chinese diplomats were burning documents in the courtyard. 

While markets have – so far – shrugged off the worsening of relations between the two superpowers, China's retaliation may weigh on sentiment, at least temporarily. 

Investors are shrugging off rising US coronavirus cases and deaths, with the latter surpassing 1,100 once again. New figures coming out of Florida, California, Texas, and other states may weigh on sentiment. 

After US Existing Home Sales bounced in June to 4.72 million annualized, the focus shifts to weekly jobless claims. Initial applications are for the week ending July 17 – which is the same time Non-Farm Payrolls surveys are conducted. Economists expect a halt to the downtrend and perhaps a worrying move up.

See Jobless Claims Preview: Improvement stalls and worry returns

The US and the UK have been discussing future trade relations but failed to move forward. Estimates now stand at achieving an accord only in 2021 – after the Brexit transition period. That dampens hopes for a positive shift to enhanced trading with partners outside the EU. Will the pound take note? 

Perhaps an update on Brexit talks rather than Anglo-American ones will move the dial. Michel Barnier, Brussels' top negotiator, and his UK counterpart David Frost are scheduled to provide an update on talks later in the day. So far, both sides have failed to make progress, despite reported concessions from the EU. 

Overall, there are several dark clouds hanging over GBP/USD and its current relative resilience may make way for a downfall. 

GBP/USD Technical Analysis

Pound-dollar is still benefiting from upside momentum on the four-hour chart and trades above the 50, 100, and 200 Simple Moving Averages. On the other hand, it set a lower high by failing to break above the weekly peak of 1.2770. 

Support awaits at 1.2670, the former triple top seen earlier in the month. It is followed by the swing low of 1.2640 seen earlier int he week, and then by 1.2605 and 1.2570. 

Resistance is at 1.2715, a stepping stone on the way up, and then by July's peak of 1.2770. Next, June's top point of 1.2815 is the next level to watch.