While sterling remains resilient on the crosses, with EUR/GBP falling 0.4% in June, GBP/USD has begun the third quarter at the base of its May-June range in a technically bearish setup driven by USD strength, which can extend.
The safe-haven dollar has risen as the highly infectious Delta variant of the coronavirus weighs on the optimistic outlook for global growth. U.S.
inflation fears as the economy reopens are also lifting the USD.
While the Delta variant is rampant in the UK, the strong vaccine rollout is keeping the casualty rate low nL5N2OC59M, and the July 19 reopening remains on track nL2N2OB00E. Meanwhile, the European Union has agreed to a three-month extension of the Northern Ireland protocol, buying time for a long-term solution nL5N2OC0YQ.
Hence the pound is resilient.
The short-term GBP/USD technical picture is very negative.
Daily momentum studies, 5, 10 and 21 daily moving averages all head south, while the 21-day Bollinger bands slide, which is a strong bearish trending setup.
The falling 10-day moving average has capped on the June retreat, currently at 1.3880.
A close above 1.3880 is needed to undermine the downside bias, and a close above the 1.3994 21 DMA and 1.4001 rebound high in June, would end it.
The downtrend targets 1.3756, 61.8% of the 2021 rise, then the 1.3669 April low.
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