GBP/USD has been attempting recovery as markets swing back to positive ground. However, virus variant concerns and the American shopper may push cable below 1.40, Yohay Elam, an Analyst at FXStreet, reports.
1.40 is a critical separator of ranges
“Prime Minister Boris Johnson has come short of suggesting a reversal in policy but he has expressed concerns about the rapid spread of the Indian variant in the UK. Various health officials have called on the government to reconsider its roadmap and take a more cautious approach. If these voices grow louder – and if COVID-19 cases rise – sterling could suffer. “
“Retail Sales statistics for April are forecast to show a moderate increase after March’s 9.8% leap. Only a drop in expenditure could further pressure the dollar, and that seems highly unlikely.”
“The last word of the week belongs to the preliminary Consumer Sentiment figures from the University of Michigan. Economists expect a moderate increase, extending the recovery. Any surprise in the headline or the inflation components could boost the greenback.”
“Pound/dollar’s first brush with the 1.40 line after the big breakout resulted in a bounce. Nevertheless, momentum on the four-hour chart has turned to the downside, raising the chances of a downfall. On the other hand, cable still holds above the 50, 100 and 200 Simple Moving Averages (SMAs).”