Trading | 2 months ago
The GBP/USD pair registered a strong bearish momentum today and declined further. Investors are concerned due to the massive resurgent in COVID cases from the different sectors in the United Kingdom. The UK reported over 42,000 new coronavirus cases which is more than enough to extend the deadline for lifting of COVID-19 restrictions for another month.
Today, GBP/USD is down 0.25% intraday and is trading around 1.382 and is expected to break the minor support level at 1.381 due to the selloff. The Pound rose against the U.S. dollar by 0.45% yesterday as UK inflation data report presented a better-than-expected results. The reported inflation rate was almost at three years high. However, even after this report, GBP/USD is trading below the 21-Period Exponential moving average.
Meanwhile the US dollar is moving up as the Dollar Index that tracks the performance of U.S. dollar against the world's top traded currencies rose by 0.02%. As the uncertainty in the economy of a country grow, investors tend to invest in U.S. dollar which has represented a solid data after the economic recovery from the COVID pandemic. This is the same situation with the UK as foreign institutional investors and domestic investors are overwhelmed by the spread of highly contagious delta variant of coronavirus in United Kingdom and other parts of Europe.
The long-term technical outlook for GBP/USD Remains bearish as it is trading below the 100-day exponential moving average. The relative strength indicator indicates the absent of buying interest, as hovers within the range of overbought and oversold regions. Therefore, one must look for selling opportunities in GBP/USD and target for 1.37500 level.
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