GBP/USD Daily Forecast – Another Test Of Resistance At 1.3625
GBP/USD Video 06.01.21.
British Pound Is Mostly Flat Against U.S. Dollar
GBP/USD is testing the resistance at 1.3625 while the U.S. dollar is mostly flat against a broad basket of currencies.
The U.S. Dollar Index is currently trying to get below the nearest support level at 89.40. If the U.S. Dollar Index manages to settle below this level, it will gain additional downside momentum which will be bullish for GBP/USD.
Today, foreign exchange market traders will focus on the results of the runoff elections in Georgia. At this point, it looks like Democrats have good chances to win both seats and take control of the Senate. This is a bearish scenario for the U.S. dollar as Democrats favor additional stimulus.
Traders will also have a chance to take a look at the final readings of Services PMI reports. In the UK, Services PMI is expected to increase from 47.6 in November to 49.9 in December.
Any increase will likely be temporary as Britain has just imposed a third lockdown which will put additional pressure on the services segment.
Meanwhile, the U.S. Services PMI is projected to decline from 58.4 in November to 55.3 in December. Numbers above 50 show expansion.
GBP/USD is currently trying to settle above the nearest resistance level at 1.3625. If this attempt is successful, GBP/USD will move towards the next resistance at 1.3665.
RSI is in the moderate territory so there is plenty of room to gain additional momentum in case the right catalysts emerge. If GBP/USD manages to settle above the resistance at 1.3665, it will continue its upside move and head towards the resistance at 1.3710.
On the support side, the nearest support level for GBP/USD is still located at 1.3575. If GBP/USD declines below this level, it will head towards the next support level at 1.3540. The 20 EMA is located at 1.3530 so GBP/USD will likely receive strong support in the 1.3530 – 1.3540 area. In case GBP/USD declines below this support area, it will head towards the next support level at 1.3500.
For a look at all of today’s economic events, check out our economic calendar.