InstaForex

July 8, 2021

Investors Ready For Lower GBP/USD Decline

 The pound sterling was seen trying to display a strengthening in the European session yesterday, but the situation failed to last long after investors again saw the British currency depreciate again in the New York session.


A warning by UK Health Minister Sajid Javid on the risks of Covid-19 overshadowed the announcement by Prime Minister Boris Johnson for the reopening of the economy on 19 July.


Most recently, the UK reported daily infection cases exceeding 32,000 making the number the biggest daily increase since the end of January.


Thus, it is difficult to see the Pound performing well for the near term while the US dollar is still positive to maintain its strengthening pattern towards the end of this week.




On the price chart of the GBP/USD pair, the price is seen recording the latest lows again for the week reaching almost the level of 1.37500.


But previously, the price was seen making a rise in the European session to the level of 1.38300 earlier and tested the resistance level of the Moving Average 50 (MA50) on the 1 -hour time frame of the price movement.


Prices failed to break through the barrier to signal a price increase, instead declining again at the beginning of the New York market session to continue the downtrend.



After hitting the latest weekly lows, the price rose slightly before closing the New York session trading slow around the 1.38000 level.


Investors will expect a lower price drop today to test last week’s support level around 1.37400.


The continued decline is seen to test the focus support zone at 1.37000 where this zone has managed to support the price increase in April trading.


However, if the price manages to re-rise past the price zone 1.38000-1.38300, the higher rise is expected to head back to the SBR (support become resistance) zone at 1.39000-1.39200.


Next, a clearer signal for a bullish trend will push the price to re -test the resistance zone at 1.40000.