GBP/USD Outlook (05 August 2021)
ByJin Dao Tai
AUG 5, 2021
Overall, GBP/USD is ranging across. Recently, GBP/USD weakened after the hawkish remarks on QE tapering sent out by FOMC committee members.
The UK Construction PMI data (Forecast: 64.5, Previous: 66.3) will be released later at 1630 (GMT+8).
The Bank of England (BoE) will be announcing their monetary policy decision later at 1900 (GMT+8). It is expected that the central bank will be holding its monetary policy unchanged. Also, it is unlikely that the BoE will providing any details on quantitative easing (QE) tapering due to existing uncertainties arising from the COVID Delta variant, slowdown in business activities and the ending of the UK furlough scheme in September. The central bank will also be releasing its quarterly projection materials in which it is likely to revise its inflation projection upwards.
Currently, GBP/USD is testing to break below the key level of 1.39. Its next support zone is at 1.38000 and the next resistance zone is at 1.40000.
If the BoE does not provide any details on QE tapering and fails send out any hawkish tone, look for short-term selling opportunities of GBP/USD if it breaks below the key level of 1.39.
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