GBP/USD Daily Forecast – British Pound Is Under Pressure At The Start Of The Week

British Pound Is Losing Ground Against U.S. Dollar

GBP/USD is currently trying to settle below the support at 1.3230 while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index received support near the 96 level and rebounded towards 96.25. In case the U.S. Dollar Index manages to settle above this level, it will move towards the next resistance level at 96.50 which will be bearish for GBP/USD.

There are no material economic reports scheduled to be released in the U.S. and UK today so foreign exchange market traders will focus on the dynamics of U.S. government bond markets.

The yield of 2-year Treasuries pulled back from yearly highs on Friday. However, it has already returned to growth. The yields of longer-dated bonds are moving higher as well, which may provide additional support to the American currency.

On Wednesday, the Fed will announce its Interest Rate Decision, so traders should keep in mind that trading may be choppy ahead of this important event.

Technical Analysis

GBP/USD managed to settle below 1.3250 and is testing the next support level which is located at 1.3230. In case GBP/USD manages to settle below the support at 1.3230, it will head towards the next support level at 1.3200. RSI is in the moderate territory, and there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

If GBP/USD declines below 1.3200, it will head towards the next support at 1.3170. A move below the support at 1.3170 will open the way to the test of the next support at 1.3140.

On the upside, GBP/USD needs to stay above 1.3230 to have a chance to develop upside momentum in the near term. The next resistance level for GBP/USD is located at 1.3250. In case GBP/USD gets above 1.3250, it will move towards the resistance at 1.3280. A successful test of this level will push GBP/USD towards the 20 EMA at 1.3300.

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