GBP/USD Daily Forecast – British Pound Is Under Pressure Ahead Of BoE Decision

British Pound Is Losing Ground Against U.S. Dollar

GBP/USD is currently trying to settle back below the support level at 1.3665 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index failed to settle below the support level at the 20 EMA at 93.85 and moved back above the 94 level. The nearest resistance level for the U.S. Dollar Index is located at 94.20. A move above this level will open the way to the next resistance at 94.50 which will be bearish for GBP/USD.

Yesterday, the Fed left the interest rate unchanged and announced that it would decrease its asset purchase program by $15 billion per month. Fed Chair Jerome Powell reiterated his usual dovish stance, putting pressure on the American currency. However, the U.S. dollar found buyers after the initial sell-off, and it looks that some traders are ready to bet that inflation is not temporary and that Fed will be forced to raise rates sooner than expected.

Today, foreign exchange market traders will focus on the Bank of England Interest Rate Decision. As usual, traders will pay close attention to any hints on the future rates’ trajectory, which may have a significant impact on GBP/USD.

Technical Analysis

GBP/USD failed to settle above the resistance at 1.3690 and declined below the support level at 1.3665. If GBP/USD settles below this level, it will move towards the next support at 1.3635.

A successful test of the support at 1.3635 will open the way to the test of the next support at 1.3600. In case GBP/USD manages to settle below 1.3600, it will head towards the support level at 1.3575.

On the upside, the nearest resistance level for GBP/USD is located at 1.3690. If GBP/USD gets above this level, it will move towards the resistance at the 50 EMA at 1.3710. A successful test of the resistance at the 50 EMA will push GBP/USD towards the next resistance at 1.3745.

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