Weekly Forecast - GBP/USD 21st – 25th June 2021

Daily chart for mid-June shows bears taking charge.

Hawkish Fed – these words have seldom been printed together when the sudden alteration from the earths most authoritative bank has been enhancing the buck. For GBP-USD, the decision now swings to the BoE, which needs to consider economic hopefulness and the widespread of the covid virus.

GBP-USD this week

The Fed surprised financial markets by indicating two rate climbs in 2023, conflicting to none at all previously. Also, the bank elevated other predictions such as that for inflation – with basic prices set to hit 3% in 2021 – and heralded the fast regaining.

The predictions of less dollars printed and increased borrowing costs pushed the dollar swelling across the charts, and the greenback hardly stilled to break in even when Treasury yields came down.

Stockholders would like to know if the bank is bearing in mind diminishing some of its stimuli anytime soon. The Bank of England declared a slight reduction to the stride of its bond buys last time, without changing the scope. Conversely, Chief Economist Andy Haldane recommended tapering is needed for the economy.

Besides the Bank of England, Markit's preliminary purchasing managers' indexes for June may likely push the cable, particularly that for the large services sector.

Technical Analysis – GBP-USD

Bears are gaining grounds. The pounds abrupt drop sent impetus on the daily chart to negative region for the first time since April. Besides, the duo sliced through the 50-day and the 100-day SMA. At the time of scripting this analysis, the Relative Strength Index (RSI) is still above 30, hence above oversold area, contributing to the bearish bias.

Some support area is at 1.3855, the post-Fed manger. It is shadowed by price 1.38, which mitigated GBP-USD at the beginning of last month, and by the crucial 1.3670 line that was a double bottom during the spring. Even lesser, 1.3565 is the next downside mark.

At price 1.3930 lies some resistance, which detained pound earlier last month, then by 1.4010, the sieve of trading ranges which had formerly crumpled regaining efforts. Further above is 1.4140 and 1.4220.

Sentimental Analysis – GBP-USD

The US Federal Reserve bullish surprise will probably have more swelling impacts on financial markets, holding the dollar bid. The Bank of England is improbable to completely imitate the Fed, and short of a strong zenith in the pandemic cases, heaviness on the pound is set to linger further. Above all, another week of dips is on the cards, with the Bank of England only offering restricted care.