GBP/USD: PM Johnson's issues and upbeat US data set to drag cable down

GBP/USD has been edging off the highs as rising US yields boost the dollar. Boris' issues and strong US economy are set to outweigh technicals and push the pound down, according to FXStreet’s Analyst Yohay Elam.

Fundamentals are pointing lower

“The greenback is making a comeback and this is set to extend. Personal Income and Personal Spending are set to jump as that was the month Americans received their stimulus checks. Investors will likely focus on the Core Personal Consumption Expenditure (Core PCE) figure – the Fed's preferred inflation gauge. It is set to jump to around 1.8%, closer to the bank's 2% target. The figures may give the greenback another boost.” 

“There are no notable British releases, but politics will likely weigh on sterling. Prime Minister Boris Johnson has come under growing scrutiny for allegedly asking Conservative Party donors to pay for renovating his official residence. The PM's issues may hobble the government's efforts to manage the recovery.”

“Pound/dollar has been holding up above the 50 Simple Moving Average (SMA) on the four-hour chart, and also benefits from upside momentum. The Relative Strength Index (RSI) is balanced, thus far from causing worries about overbought conditions.” 

“Some support awaits at 1.3930, the daily low, followed by 1.3860, a cushion seen earlier this week. Resistance is at 1.3975, the daily high, and then by the all-important 1.4010 cap.”