GBP/USD Battles With 1.3800 The Bearish Potential Is Limited In The Near-Term

GBP/USD Current price: 1.3801

• UK Health Minister Sajid Javid noted that covid cases could soon rise above 100K a day.
• The UK Markit Construction PMI improved in June to 66.3 from the previous 64.2.
• GBP/USD battles with 1.3800 the bearish potential is limited in the near-term.

The GBP/USD pair peaked at 1.3898, its highest in over a week, but lost the 1.3800 level during US trading hours, amid a sour market’s mood. The early advance was supported by upbeat UK data, as the June Markit Construction PMI printed at 66.3, better than the previous 64.2 and the expected 63.8. On a down note, the European Union threatened to take legal action against the UK amid violations of the Brexit agreement.

Meanwhile, UK health advisers asked the government to retain some coronavirus-related measures, despite Prime Minister Boris Johnson reaffirmed on Monday that all restrictions would be lifted on July 19. The UK reported 28,773 new cases on Tuesday, the biggest one-day increase since January. Health Minister Sajid Javid noted that new cases could soon rise above 100,000 a day but agreed with Johnson on lifting restrictions on July 19. On Wednesday, the UK will publish minor housing-related data.

GBP/USD Short-Term Technical Outlook

The GBP/USD pair bottomed at 1.3772 as it is currently battling to overcome the 1.3800 threshold. The short-term picture skewed the risk to the downside without confirming another leg south. The 4-hour chart shows that the pair met sellers on an approach to a bearish 100 SMA, now developing below a flat 20 SMA. The Momentum indicator consolidates just above its midline, while the RSI recovers within negative levels. The bearish case would lose strength on a recovery above 1.3840, the immediate resistance level.

Support levels: 1.3770 1.3725 1.3680

Resistance levels: 1.3840 1.3890 1.3930

Image by Paweł Szymczuk from Pixabay