GBP/USD Forecast: UK reopenings underpin the pound

Valeria Bednarik FXStreet

GBP/USD Current price: 1.4140

BOE to focus on returning inflation sustainably to target, according to Vlieghe.
The UK will release employment-related data on Tuesday.
GBP/USD is poised to extend its advance beyond 1.4200 in the near-term.

The GBP/USD pair surged in the final trading session on Monday to 1.4146, holding nearby ahead of the Asian opening. The pair quickly reverted dips below the 1.4100 threshold, as optimism on reopenings underpinned the pound. According to the latest data available, shoppers in Britain were up 0.5% in the week ended May 15, as the country prepared for indoor hospitality. Authorities are concerned about the Indian strain spreading in the country, although so far, the reopening program continues without setbacks.

Bank of England’s policymaker Gertjan Vlieghe said that the central bank is now focused on returning inflation sustainably to the target over the medium term, adding that growth this year should be seen as a return to normal. The UK will publish employment-related figures on Tuesday. The ILO Unemployment Rate for the three months to March is foreseen to be steady at 4.9%. The number of unemployed is expected at 25.6K in April, up from 10.1K.

GBP/USD short-term technical outlook

From a technical point of view, the GBP/USD pair is poised to extend its advance. The 4-hour chart shows that the 20 SMA provided intraday support, currently hovering around 1.4070. Technical indicators hold near their daily highs, consolidating gains, as the longer moving averages advance far below the current level. The pair recently topped at 1.4166, with a clear break above it favoring an extension beyond the 1.4200 threshold.

Support levels: 1.4115 1.4070 1.4020

Resistance levels: 1.4170 1.4230 1.4280

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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