“It’s coming home,” the chant for England’s football team, may be on the minds of British fans ahead of Sunday’s final versus Italy. Perhaps “it is coming down” would be a better phrase for the GBP/USD. Cable has risen to 1.38, benefiting from a dollar weakness, but there are five reasons to believe the pair will fall again.
“The US dollar shrugged off a steep reduction in returns on US debt, which is normally linked to its strength. The greenback has potential to strengthen now that Treasury yields have surged above 1.30 percent “”Rise up.”
“Over 32,000 cases were confirmed on Thursday as the highly transmissible Delta covid strain continues to spread fast in the UK, threatening the reopening of the outbreak. While this strain is driving up infection rates in the United States, the safe-haven currency may gain strength.”
“During the summer, the EU and the UK reached an agreement on a “truce” on the Northern Ireland protocol. Another concern, though, has risen from the ashes: Britain’s divorce cost. Brussels is demanding EUR6 billion more than the United Kingdom is willing to pay. That row is putting a strain on the pound.”
“In May, the UK’s Gross Domestic Product increased by only 0.8 percent, falling short of estimates. Even though this is simply a monthly report rather than a quarterly report, a slower expansion does not bode good for the pound.”
“On the four-hour chart, the pound/dollar continues to trade below the 50, 100, and 200 Simple Moving Averages, indicating bearish momentum. The Relative Strength Index (RSI) is also above 30, indicating that the pair is not oversold. The bears are in charge.”/n
