GBP/USD Daily Forecast – Another Test Of Resistance At 1.3400

British Pound Gains Ground Some Ground Against U.S. Dollar

GBP/USD continues its attempts to settle above the resistance at 1.3400 while U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle below the support level at 96 and rebounded closer to the resistance at 96.25. In case the U.S. Dollar Index gets back above this level, it will move towards the next resistance at 96.50 which will be bearish for GBP/USD.

There are no important economic reports scheduled to be released in the UK and U.S. today, so foreign exchange market traders will focus on general market sentiment.

It should be noted that the recent increase in the number of new coronavirus cases had no material impact on financial markets. Trading volumes should gradually start to increase, although it remains to be seen whether traders will be ready for big moves in the remaining days of 2021.

Technical Analysis

GBP/USD remains stuck near the 1.3400 level. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

If GBP/USD settles above 1.3400, it will get to another test of the resistance level at 1.3420. A move above the resistance at 1.3420 will open the way to the test of the next resistance which is located at the recent highs at 1.3440. In case GBP/USD manages to settle above 1.3440, it will head towards the next resistance level at 1.3460.

On the support side, the nearest support level for GBP/USD is located at the 50 EMA at 1.3385. In case GBP/USD manages to settle back below the support at the 50 EMA, it will gain additional downside momentum and head towards the support at 1.3370. A move below 1.3370 will push GBP/USD towards the next support level which is located at 1.3350.

For a look at all of today’s economic events, check out our economic calendar.