GBP/USD Daily Forecast – Attempt To Settle Back Above 1.3000

GBP/USD Video 29.10.20.

British Pound Rebounds Against U.S. Dollar

GBP/USD managed to get back above 1.3000 as the U.S. dollar lost its upside momentum against a broad basket of currencies.

Yesterday, the U.S. Dollar Index made an attempt to settle above the 50 EMA at 93.55 on fears about the second wave of lockdowns in Europe. However, it did not manage to gain sufficient momentum and settled in the range between the 20 EMA at 93.30 and the 50 EMA at 93.55. If the U.S. Dollar Index moves below the 20 EMA, it will decline towards the support at the 93 level which will be bullish for GBP/USD.

Today, UK is set to report that Nationwide Housing Prices gained 0.4% month-over-month in October. On a year-over-year basis, Nationwide Housing Prices are projected to increase by 5.2%. Meanwhile, Car Production is projected to decline by 24% year-over-year in September.

In the U.S., traders will pay attention to the latest Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims are expected to decline to 775,000 while Continuing Jobless Claims are projected to drop to 7.7 million.

The U.S. employment reports are especially interesting to watch since U.S. lawmakers failed to reach consensus on the new stimulus deal so the job market will remain without additional support for the upcoming weeks.

Technical Analysis

GBP/USD has rebounded back above the 50 EMA at 1.2970 and the 20 EMA near 1.3000 and is trying to gain some upside momentum. The nearest resistance level for GBP/USD is located at 1.3070.

If GBP/USD manages to settle above this level, it will head towards the next resistance at 1.3110. A move above 1.3110 will push GBP/USD towards the recent highs near 1.3180.

On the support side, the 20 EMA near 1.3000 will likely serve as the first support level for GBP/USD. If GBP/USD moves below the 20 EMA, it will head towards the 50 EMA at 1.2970.

In case GBP/USD settles below the 50 EMA, it will gain downside momentum and get to the test of the recent lows near 1.2920. There are no material levels between the 50 EMA at 1.2970 and the next support at 1.2920 so this move may be fast.

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