GBP/USD Daily Forecast – British Pound Is Under Pressure

U.S. Dollar Moves Higher Against British Pound

GBP/USD is moving towards the support level at 1.3800 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to settle back above the 20 EMA at 92.55 and is trying to get to the test of the resistnace level at 92.80. A move above 92.80 will push the U.S. Dollar Index towards the next resistance at 93.10 which will be bearish for GBP/USD.

UK has recently released Claimant Count Change report for July which indicated that the number of people claiming unemployment benefits declined by 7,800 in July compared to analyst consensus which called for a decrease of 180,000.

Today, foreign exchange market traders will also have a chance to take a look at economic reports from U.S. Analysts expect that Retail Sales declined by 0.2% month-over-month in July after growing by 0.6% in June. Industrial Production is projected to increase by 0.5% month-over-month in July, while Manufacturing Production is expected to grow by 0.6%.

Technical Analysis

GBP/USD settled below the support level at 1.3835 and is trying to get to the test of the next support level at 1.3800. In case GBP/USD manages to settle below 1.3800, it will move towards the next support at 1.3780. RSI is in the moderate territory, and there is plenty of room to develop additional downside momentum in case the right catalysts emerge.

If GBP/USD settles below 1.3780, it will head towards the next support which is located at 1.3745. A move below the support at 1.3745 will open the way to the test of the support level at 1.3710.

On the upside, the previous support level at 1.3835 will serve as the first resistance level for GBP/USD. In case GBP/USD manages to settle back above this level, it will head towards the resistance at the 20 EMA at 1.3850.

If GBP/USD gets back above the 20 EMA, it will move towards the 50 EMA at 1.3870. A successful test of the resistance at the 50 EMA will push GBP/USD towards the resistance at 1.3900.

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