GBP/USD Daily Forecast – British Pound Is Stuck In A Tight Range

GBP/USD Video 26.05.21.

British Pound Tries To Gain Some Ground Against U.S. Dollar

GBP/USD is currently trying to settle back above 1.4150 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index has recently made another attempt to get to the test of the support level at 89.50 but failed to develop sufficient downside momentum. In case the U.S. Dollar Index declines below 89.50, it will move towards the support at 89.20 which will be bullish for GBP/USD.

Yesterday, U.S. reported that New Home Sales declined by 5.9% month-over-month in April compared to analyst consensus which called for a decline of 10%. The previous report was revised from 20.7% to 7.4%, and it looks that New Home Sales have settled below levels that were seen in the second half of 2020.

Meanwhile, CB Consumer Confidence report indicated that Consumer Confidence decreased from 117.5 (revised from 121.7) to 117.2 compared to analyst consensus of 119.2.

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 general market sentiment and dynamics of U.S. government bond markets.

Treasury yields are currently trying to rebound after a material decline during yesterday’s trading session, but it remains to be seen whether this rebound will be sustainabla as dovish comments from Fed officials calmed markets.

Technical Analysis

GBP/USD is currently trying to settle above 1.4150. In case this attempt is successful, it will head towards the resistance at 1.4180.

A move above 1.4180 will push GBP/USD towards the resistance at 1.4200. In case GBP/USD manages to settle above 1.4200, it will head towards the next resistance which is located at the recent highs at 1.4240.

On the support side, a move below 1.4150 will open the way to the test of the support at 1.4100. If GBP/USD declines below 1.4100, it will head towards the support at the 20 EMA at 1.4085.

A successful test of the support at the 20 EMA will push GBP/USD towards the support at 1.4050. If GBP/USD settles below this level, it will move towards the support at 1.4020.

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