GBP/USD Outlook: Sterling Remains In Red

Technical analysis of Forex market

Cable stands at the back foot on Monday and fell to one-month low (1.4069), in extension of Friday’s 0.45% drop that generated negative signal on formation of bearish engulfing pattern on daily chart.

Stronger dollar keep pound under pressure, along with Brexit tensions and fears that the end of Covid restrictions in England might be delayed.

UK PM Boris Johnson will hold a news conference later today and expected to announce that the end of coronavirus restrictions will be delayed by few weeks, on raising concerns of fresh and rapid rise of Delta variant of coronavirus infections and hospitalizations.

The government remains cautious and may opt for up to a month delay in ending lockdown to prevent stronger complications, with such decision to be in line with government’s earlier announcements in which it said that restrictions would be lifted not earlier than June 21.

Traders also await the news from Fed which would also strongly impact the sterling.

Daily techs are bearishly aligned, but fresh bears need a firm break of dented Fibo support at 1.4112 (23.6% of 1.3669/1.4249, reinforced by rising 30 DMA) that would expose more significant levels at 1.4027/00 (Fibo 38.2%/psychological).

Near-term bias is expected to remain with bears while the price action stays below 20 DMA (1.4154).

Res: 1.4112, 1.4141, 1.4154, 1.4185.
Sup: 1.4069, 1.4027, 1.4000, 1.3986.