GBP/USD: There is room for cable to climb down from its highs

GBP/USD has been benefiting from PM Johnson's reopening announcement. Notwithstanding, Yohay Elam, an Analyst at FXStreet, explains why Freedom Day enthusiasm could make way for a free-fall.

The ISM Services PMI could end the current spell of dollar weakness

“England will ditch hundreds of COVID-19-related restrictions and reopen its economy in what has also been dubbed the ‘Big Bang.’ The opposition and health officials criticized the decision and there is plenty of time until July 19 for the PM to change his mind, as in previous occasions. If the Delta variant – responsible for 97% of cases in the UK – continues spreading fast, sterling could fall.”

“Brexit refuses to disappear and seems to already be weighing down on the pound. Maroš Šefčovič, the EU´s point 'man on the topic, said that the bloc would step up legal proceedings without any moves from the UK to remedy the violation of the agreement. London and Brussels are at odds over the implementation of the Northern Irish protocol.” 

“The ISM Services Purchasing Managers' Index is set to show a mild decrease in the headline figure and the Prices Paid component – a gauge of inflation expectations. Any hint that price pressures persist could serve as a trigger to pile back into the greenback.”

“Support is at 1.3820, which cushioned it on Monday. It is followed by 1.3885, which was a swing low in mid-June.”

“Resistance awaits at the daily high of 1.39, followed by 1.3835, which capped cable in late June.”