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  • GBP/USD remains sluggish below the 1.3850 area. 
  • The UK PM may have to deal with many internal problems after parliament returns from the vacations. 
  • Delta variant spread in the country is weighing on the Pound. 

The GBP/USD price analysis suggests bearish bias, suggesting further losses ahead as the US dollar is slightly gaining on the day.

The GBP/USD pair could not hold above 1.3880 on Friday following disappointing US employment data last week, which gave the pair some momentum after two weeks of weakness.

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Due to the US holiday on Monday, the GBP/USD pair is likely to drift with general market sentiment, which looks slightly mixed in the early morning. However, when parliament returns from summer vacation, the prime minister may deal with some rollercoaster rides.

Over the past 18 months, the pandemic has piled up many internal problems, and since the country has probably been through the worst, it’s time to confront it and clean it up.

Likely, the prime minister’s plan to raise the national insurance tax will be the first item on the agenda due to his promise in his 2019 manifesto, made before COVID-19, turned the world upside down, and debts exploded.

He will face a lot of backlash and reshuffle in the coming week, making the pound very sensitive. Inflation, labor shortages, the ongoing pandemic, and the Afghanistan issue are also on the agenda.

As politicians rush to revaccinate and vaccinate children aged 12-15, daily rates in the UK are declining, but weekly rates are rising. According to government data, 37,011 new cases of COVID have been registered in the past 24 hours, and 68 deaths have been linked to the virus. “Sky News” reported that 35,196 outbreaks and 61 deaths occurred last week, and 37,578 cases were reported yesterday.

The GBP/USD prices are coming under additional pressure from worries about the global economy and Brexit, and COvid.

As the US Dollar Index (DXY) tries to rebound on slightly cautious sentiment without any key data/events, the GBP/USD pair could extend recent declines.

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GBP/USD price technical analysis: Bulls weakening under 1.3850

GBP/USD 4-hour price chart analysis
GBP/USD 4-hour price chart analysis

The GBP/USD price is consolidating under 1.3850. The pair has been experiencing shorter spikes, but the short-term direction is still unclear, and support and resistance have been key in the past few weeks. It will be tough to reach 1.40 again as buyers focus on the 200 and 100-day moving averages that converge between 1.3880 and 1.3920.

On the downside, the pair may find some support near the 1.3800 area ahead of 1.3770 and then 1.3750.

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