- GBP/USD is now heading towards a 38.2% Fibonacci level of 1.3675 level ahead of the Jackson Hole Symposium.
- Federal Reserve Bank of Kansas City arranges the Jackson Hole Symposium this week.
- Forex trading market participants may sell below $1.3675 to target $1.3599 and $1.3555 levels.
The GBP/USD closed at $1.3621 after placing a high of $1.3649 and a low of $1.3601. GBP/USD extended its loss for the second consecutive session and dropped to near one-month lowest level amid the rising risk-off market sentiment and the strength of the US dollar. The riskier asset GBP/USD suffered due to the weakness of the British Pound combined with the risk-off market sentiment. The GBP/USD is now heading towards a 38.2% Fibonacci level of 1.3675 level ahead of the Jackson Hole Symposium.
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Intensified Covid-19 Cases in British Weights in GBP/USD
Britain’s coronavirus statistics were far from satisfying. The total number of coronavirus cases in the country reached 6,492,906, and the total number of deaths due to coronavirus in the UK reached 131,640. Moreover, the rising fears of the Delta variant spreading across the country kept the British Pound under pressure, adding to the loss of GBP/USD.
UK Health Security Agency to Launch National Surveillance Program
The UK Health Security Agency has announced that it will launch a new national surveillance program next week. They will offer antibody testing to adults who test positive in Britain. According to the statement issued by the agency, this will help improve the authorities’ understanding of immunity against the virus from vaccination and infection.
Furthermore, scientists in Britain were also examining whether smaller doses of boosters could be used to save vaccines for the rest of the world. A new proposal to use “fractional doses” has come forward to ensure that more people can get vaccinated despite the shortage of supplies.
All these efforts by the British government and health authorities to fight the coronavirus added to the concerns that the coronavirus will continue to disrupt the economy. Moreover, vaccinations are not enough to control the spread of the virus. These concerns kept weighing on the British Pound and added to the further loss in GBP/USD.
Economic Events & their Impact on GBP/USD
On the data front, at 04:01 GMT, the GfK Consumer Confidence in August dropped to-8 against the expected-7 and weighed on the British Pound. That added to the further loss in GBP/USD.
At 11:00 GMT, the retail sales from the country in July also dropped to-2.5% against the projected 0.2% and weighed on the British Pound. That pushed GBP/USD further to the downside.
In July, the Public Sector Net Borrowing declined to 9.6B against the forecasted 10.5B and supported the British Pound. That caused a further loss in GBP/USD on Friday.
A stronger dollar dragged the GBP/USD down to 1.3640
On the other hand, the US Dollar Index reached its 9-and-half month highest level on Friday at 93.73 and added to the further loss in GBP/USD. The greenback was gaining traction in the market due to its safe-haven status amid rising concerns over the global economic recovery.
The rising US yields on the benchmark 10-year note, which reached 1.267%, also supported the downward trend of the GBP/USD currency pair. The risk-off market sentiment triggered by the accelerated worries about the coronavirus spread due to the Delta variant also added to the loss of GBP/USD on Friday, as it is a riskier currency pair and tends to decline in risk-off market sentiment.
Jackson Hole Symposium in Focus This Week
The Federal Reserve Bank of Kansas City arranges the Jackson Hole Symposium. It’s an Economic Policy Symposium, held in Jackson Hole, Wyoming, which is accompanied by central bankers, finance ministers, academics, and financial market participants worldwide.
Although the sessions are closed to the media, officials frequently speak with journalists throughout the day. Central bankers’ and other influential officials’ comments and speeches can cause significant market volatility.
GBP/USD Price Forecast – Daily Technical Levels
Support Resistance
1.3613 1.3633
1.3603 1.3643
1.3593 1.3654
Pivot Point: 1.3623
GBP/USD Price Forecast – Technical Analysis: Eyes on Jackson Hole Symposium
On the 4-hour timeframe, the GBP/USD pair has bounced off the support level of 1.3601 level. The GBP/USD is now heading towards a 38.2% Fibonacci level of 1.3675 level ahead of the Jackson Hole Symposium.
Simultaneously, the 50 day EMA (exponential moving average – red line) will extend an immediate hurdle at 1.3675. At the same time, the breakout above the 1.3675 level could lead the GBP/USD towards a 61.8% Fibonacci retracement level of the 1.3717 level.
On the bearish side, the breakout of the 1.3601 support level could lead the GBP/USD pair further lower towards the 1.3550 level.
Whereas, the stochastic RSI indicator is now holding in the overbought zone. It could trigger another round of sell-off in the GBP/USD pair. Therefore, the Forex trading market participants may sell below $1.3675 to target $1.3599 and $1.3555 levels. All the best!
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