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  • GBP/USD remains positive despite slight losses during the Asian session.
  • Poor risk sentiment may hamper the bullish momentum.
  • Covid spread can weigh on the British Pound.
  • BOE hawkishness could be strong support for the pair.

The GBP/USD daily price action suggests a positive outlook as the pair managed to gain back the pips lost in the Asian session. The GBP/USD pair retreated to mid-1.3800 during the earlier Asian session as the risk sentiment seemed not healthy.

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At the time of writing, the GBP/USD is at 1.3863, the same level it closed on Friday.

In the last week, the US Dollar rose, and the stocks plunged after the US PPI gained 1% m/m in July that exceeded the expectations of 0.6%. However, the Michigan consumer sentiment index missed expectations with a big gap that weighed on the Greenback and supported the GBP/USD pair.

The capital flew to the safe-haven assets as the rapid spread of Delta variant soured the risk sentiment. As a result, the DXY Dollar Index gained on the day and acquired the mid-92.00 level amid risk flows.

The British Pound struggles against the Greenback as the UK GDP for the second quarter could not impress the buyers. The reading came at 4.8%, slightly missing the expectations of 5%.

The monetary policy decision in August from the Bank of England continues to lend support to the Pound. However, although the normalization policy may start next year, there is no timeline for the rate hike asset purchase tapering.

Coronavirus fears in the UK

The UK reported fresh infections on Sunday, counted to 26,750. Experts have warned that the current week may see a spike in the coronavirus cases.

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GBP/USD price technical analysis: Key SMAs to cap gains

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

The GBP/USD managed to close above the 20-period SMA on the 4-hour chart. However, the price remains in a narrow range, capped by the 50-period and 200-period SMAs. So far, the pair have done 44% average daily range while volume is slightly positive for the pair. The price may not turn bullish unless it stays below the 1.3900 mark.

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