GBP/USD Outlook (24 June 2021)

#OPINIONLEADER#

ByJin Dao Tai

 JUN 24, 2021

Overall, GBP/USD is trending downwards. Recently, GBP/USD bounced off the resistance zone of 1.40000.

The UK flash PMI data released yesterday indicated continued expansion in the manufacturing sector while a slight slowdown in the services sector was likely due to the extension of COVID restrictions into July.

• Flash Manufacturing PMI (Actual: 64.2, Forecast: 64.1, Previous: 65.6 revised from 66.1)
• Flash Services PMI (Actual: 61.7, Forecast: 62.9, Previous: 62.9 revised from 61.8)

The Bank of England (BoE) will be announcing their monetary policy decision later at 1900 (GMT+8). The central bank is expected to keep monetary policy unchanged. Pay attention to whether the BoE is looking into quantitative easing (QE) tapering. The forecast for the asset purchase facility votes indicates that one committee member continues to vote for a cut in QE. With the recent rise in UK inflation and the strong economic recovery, more committee members may be voting for a tapering.

Currently, GBP/USD is moving towards the resistance zone of 1.40000 and the next support zone is at 1.38000.

If the BoE sends out any hawkish tone such as saying that it is looking to taper QE, look for short-term buying opportunities of GBP/USD after it breaks the resistance zone of 1.40000.