GBP/USD Daily Forecast – British Pound Is Mostly Flat Ahead Of The Weekend

U.S. Dollar Stabilized After Yesterday’s Sell-Off

GBP/USD is currently trying to settle above the resistance at 1.3710 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle back above the resistance at 93.10. In case this attempt is successful, the U.S. Dollar Index will move towards the next resistance level at 93.40 which will be bearish for GBP/USD.

Yesterday, the Bank of England left the interest rate unchanged and maintained the current program of asset purchases. UK Manufacturing PMI declined from 60.3 in August to 56.3 in September compared to analyst consensus of 59. UK Services PMI decreased from 55 to 54.6 while analysts expected that it would remain unchanged at 55.

Today, foreign exchange market traders will have a chance to take a look at New Home Sales report from U.S. Analysts expect that New Home Sales increased by 0.5% month-over-month in August after growing by 1% in July.

Traders will also keep an eye on the developments in U.S. government bond markets as Treasury yields have recently moved to multi-week highs. Currently, the yield of 10-year Treasuries is trying to settle above 1.45%. In case this attempt is successful, it will move towards the 1.50% level which will be bullish for the American currency.

Technical Analysis

GBP/USD continues its attempts to settle above the resistance level at 1.3710. In case GBP/USD manages to settle above this level, it will get to another test of the next resistance which is located at the 20 EMA at 1.3750.

A move above the 50 EMA will push GBP/USD towards the resistance at the 50 EMA at 1.3785. If GBP/USD gets above this level, it will head towards the resistance at 1.3800.

On the support side, a move below 1.3710 will open the way to the test of the support at 1.3690. In case GBP/USD manages to settle back below this level, it will move towards the support at 1.3665. A successful test of the support at 1.3665 will push GBP/USD towards the support at 1.3635.

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