GBP/USD Daily Forecast – British Pound Gains Ground As Brexit Deal Looks Imminent

GBP/USD Video 24.12.20.

U.S. Dollar Remains Under Pressure Against British Pound

GBP/USD is currently trying to settle above the resistance at 1.3540 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently made another attempt to settle below the nearest support level which has emerged at 90.15. If the U.S. Dollar Index settles below this level, it will head towards the next support at the 90 level which will be bullish for GBP/USD.

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

Recent reports suggest that a Brexit deal is imminent. The market expects that negotiators will be able to come up with a compromise deal ahead of Christmas.

It should be noted that the British pound will likely remain highly volatile in holiday-thinned trading. Any moves on Brexit news may be fast, so traders should be prepared to react quickly.

Technical Analysis

GBP/USD is currently testing the nearest resistance level at 1.3540. Despite the recent upside move, RSI is in the moderate territory so there is plenty of room to gain momentum in case the right catalysts emerge.

If GBP/USD manages to settle above the resistance at 1.3540, it will head towards the next resistance level at 1.3575. This resistance level was tested during yesterday’s trading session and proved its strength.

In case GBP/USD settles above the resistance at 1.3575, it will head towards the next resistance at December highs at 1.3625. There are no important levels between 1.3575 and 1.3625 so this move may be fast. A successful test of the resistance at 1.3625 will open the way to 1.3700.

On the support side, a move below 1.3540 will push GBP/USD towards support at 1.3500. If GBP/USD gets below the support at 1.3500, it will test the next support level at 1.3485. A move below this level will push GBP/USD towards the next support at 1.3440.

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