British Pound (GBP) Price Outlook: GBP/USD May Slip Lower
GBP price, news and analysis:
- GBP/USD continues to range trade but the bias looks to be to the downside.
- The EU and the UK are continuing to argue over Northern Ireland, potentially weakening the pair modestly, and it could also suffer from persistent talk that a further lifting of UK coronavirus restrictions may be postponed.
GBP/USD range trading, bias lower
GBP/USD continues to trade within a relatively tight range between resistance at the 1.4249 high recorded on June 1 and the 1.4083 low touched on June 4. With the markets generally lacking direction at present, that provides an opportunity for range traders, who can benefit when prices are moving sideways with no clear trend higher or lower.
GBP/USD Price Chart, Two-Hour Timeframe (May 18 – June 8, 2021)
Source: IG (You can click on it for a larger image)
From a fundamental perspective, the bias looks to be modestly lower. According to reports, the EU is ready to consider retaliating against the UK for what it sees as the UK flouting its post-Brexit obligations regarding Northern Ireland. The EU and the UK are due to hold talks tomorrow and if these fail then GBP could suffer.
There is also speculation that the UK may delay plans to repeal its pandemic restrictions on June 21 because of the spread of an infectious Covid-19 variant. That would cloud the prospect of a rapid recovery of the UK economy and perhaps weaken GBP accordingly.
--- Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex
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