GBP/USD Outlook (06 August 2021)

#OPINIONLEADER#

ByJin Dao Tai

 AUG 6, 2021

Overall, GBP/USD is ranging across. Recently, GBP/USD bounced up from the key level of 1.39.

The UK Construction PMI data (Actual: 58.7, Forecast: 64.5, Previous: 66.3) released yesterday indicated a strong slowdown in the expansion of the construction sector amid shortage of construction materials.

During its monetary policy meeting yesterday, the Bank of England (BoE) held policy unchanged. For 2021, the central bank has revised its inflation projection upwards from the previous 2.5% to 4%. GDP projection for this year remained at 7.25% while unemployment rate has been revised downward from 5% to 4.75%. The BoE also highlighted that the recent rise in inflation is likely going to be transitory. In regard to the ending of the furlough scheme at the end of September, the central bank also highlighted that it does not expect unemployment rate to rise after that.

BoE committee member Broadbent will be speaking on the released monetary policy report later at 1915 (GMT+8). During this time, there may be volatility in GBP.

Currently, GBP/USD is moving down towards the key level of 1.39. Its next support zone is at 1.38000 and the next resistance zone is at 1.40000.

If GBP/USD breaks below the key level of 1.39, look for short-term selling opportunities up until the release of the U.S. Non-Farm Payroll jobs report at 2030 (GMT+8).