- Summary:
- GBP/USD price closes lower on the week at 1.3188 as cable retreats from the key 1.40000 resistance level ahead of the upcoming U.K Bank Holiday.
GBP/USD price closes lower on the week at 1.3818 as cable retreats from the key 1.4000 resistance level ahead of the upcoming U.K Bank Holiday.
The GBP/USD pair witnessed profit-taking on Friday as a failure to cross the 1.4000 barrier and a stacked economic calendar next week tested the bulls’ resolve.
The approaching four-day trading week will provide plenty in the way of catalysts for the GBP/USD price. The data-heavy week kicks off proceedings with Manufacturing PMI at GMT 08:30 on Tuesday.
This release is closely followed by the May data for both Composite and Services PMI on Thursday morning. The BOE Interest rate decision is released at 11 am the same day.
The week rounds off with Construction PMI for April on Friday morning.
Whilst no change is expected from the Bank of England regarding interest rates. The various Purchasing manager’s data releases are expected to improve on their respective April numbers.
What Comes Next For GBP/USD Price
The outlook, in my opinion, remains positive for Sterling. The U.K economy is projected to well in the months ahead, providing favorable conditions for the GBP/USD price. The upcoming data releases will highlight the rate of the economic recovery and dictate whether the GBP/USD price can establish itself above the important 1.4000 number.
On clearance of 1.4000, the February high of 1.4241 looks to be the logical target.
The price is well supported below. A trend line from the July lows is seen at 1.3770, with the 100-Day Moving Average not far behind at 1.3750.
The current price of 1.3818 offers an opportunity for a long position, intending to hold ahead of a retest of 1.4000 or a break below the trend, and 100-Day MA support, at 1.3750.
A failure to hold this support would likely initiate further downside.
GBP/USD Price Chart
Follow Elliott on Twitter