The GBP/USD avoided a break below 1.40 during the Easter holidays, but the relief will likely be short-lived if the trade war fears drive stocks lower and UK PMI misses estimates by a wide margin. What level is the pair now trading? The 3 April GBPUSD Technical Forecast reveals!
3 April, GKFX – As of writing, the GBP/USD pair is mildly bid around 1.4060, but well below the last week’s high of 1.4245.
Trade wars, risk aversion could hurt Pound
The British Pound has zero anti-risk appeal, given the massive current account deficit and Brexit uncertainty. Hence, the currency could take a hit if the European stocks drop sharply in response to rising odds of a full-blown US-China trade war.
Focus on UK PMI
UK manufacturing PMI, due at 08:30 GMT, is expected to show the pace of expansion in the activity slowed to 54.5 index points in March vs. 55.2 index points in February.
A below-forecast print could only make matters worse for Pound. Meanwhile, a better-than-expected number could strengthen the bid tone around the GBP, helping it counter the negative impact of a possible risk aversion in the stocks.
Also, note that the greenback will likely benefit from the lowered inflation/growth expectations as represented by the pullback in the government bond yields across the advanced world. So, a big move to the upside is easier said than done.
3 April GBPUSD Technical Forecast
FXStreet Chief Analyst Valeria Bednarik writes:
“From a technical point of view, the 4 hours chart shows that the pair pulled back to the daily descendant trend line broken last week, meeting selling interest near it and also around a bearish 20 SMA, a sign of bulls being not actually convinced.”
Support levels: 1.4010 1.3985 1.3940
Resistance levels: 1.4040 1.4085 1.4125
This article 3 April GBPUSD Technical Forecast was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.
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