GBP/USD Daily Forecast – British Pound Is Losing Ground At The Start Of The Week
GBP/USD Video 18.01.21.
British Pound Remains Under Pressure
GBP/USD is currently trying to settle below the support at the 20 EMA at 1.3570 while the U.S. dollar continues to gain ground against a broad basket of currencies.
The U.S. Dollar Index managed to settle above the resistance at 90.70 and is trying to get above the next resistance level at the 50 EMA at 90.95. If the U.S. Dollar Index settles above the 50 EMA, it will gain additional upside momentum and head towards the next resistance at 91.20 which will be bearish for GBP/USD.
U.S. markets are closed today, and there are no important economic reports scheduled to be released in the UK, so foreign exchange market traders will focus on general market sentiment as well as the recent data from China.
China’s fourth-quarter GDP grew by 6.5% year-over-year compared to analyst consensus which called for growth of 6.1%. China’s economy continued to rebound at a fast pace at the end of the previous year. Interestingly, strong economic data from China did not provide additional support to riskier assets, and the U.S. dollar continued to rebound against a broad basket of currencies.
GBP/USD is testing the nearest support level at the 20 EMA at 1.3570. If this test is successful, GBP/USD will head towards the next support level which is located at 1.3540. RSI is in the moderate territory so there is plenty of room to gain downside momentum in case the right catalysts emerge.
A move below 1.3540 will push GBP/USD towards the support at 1.3500. In case GBP/USD declines below the support at 1.3500, it will get to the test of the next support level at 1.3485.
On the upside, GBP/USD needs to stay above the 20 EMA at 1.3570 to have a chance to develop upside momentum in the near term. The next resistance level for GBP/USD is located at 1.3625.
If GBP/USD settles above this level, it will head towards the next resistance level at 1.3665. A successful test of the resistance at 1.3665 will push GBP/USD towards the resistance which is located at the recent highs at 1.3710.
For a look at all of today’s economic events, check out our economic calendar.