GBP/USD Daily Forecast – British Pound Attempts To Gain More Ground Ahead Of The Weekend
British Pound Is Mostly Flat Against U.S. Dollar
GBP/USD is currently trying to settle above the resistance at 1.4180 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index continues its attempts to settle below the support at 90. If the U.S. Dollar Index manages to settle below this level, it will head towards the next support at 89.75 which will be bullish for GBP/USD.
UK has just reported that Industrial Production declined by 1.3% month-over-month in April compared to analyst consensus which called for gorwth of 1.2%. On a year-over-year basis, Industrial Production grew by 27.5% as it was under huge pressure in April 2020. Meanwhile, Manufacturing Production decreased by 0.3% compared to analyst consensus which called for growth of 1.5%.
Foreign exchange market traders will continue to monitor the developments in U.S. government bond markets as Treasury yields remain under pressure after the release of U.S. inflation data. While U.S. Inflation Rate exceeded analyst expectations, traders remain confident that inflation is temporary, which is bullish for bonds and bearish for the American currency.
GBP/USD managed to settle above the 20 EMA at 1.4145 and is testing the resistance at 1.4180. In case this test is successful, GBP/USD will head towards the next resistance level at 1.4200.
A move above the resistance at 1.4200 will push GBP/USD towards the next resistance at 1.4240. In case GBP/USD settles above this level, it will head towards the resistance at 1.4280.
A successful test of the resistance at 1.4280 will open the way to the test of the next resistance at 1.4345. I’d note that GBP/USD has not visited this territory for several years so it remains to be seen whether previous levels will be relevant for today’s trading.
On the support side, the previous resistance at the 20 EMA at 1.4145 will serve as the first support level for GBP/USD. In case GBP/USD declines below this level, it will head towards the major support level which is located at 1.4100.
For a look at all of today’s economic events, check out our economic calendar.