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

GBP/USD Video 07.06.21.

U.S. Dollar Gains Ground Against British Pound

GBP/USD is currently trying to settle back below the 20 EMA at 1.4135 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level which is located at the 20 EMA at 90.20. If the U.S. Dollar Index manages to get above this level, it will move towards 90.50 which will be bearish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at UK Halifax House Price Index for May. Analysts expect that Halifax House Price Index increased by 1.2% month-over-month. On a year-over-year basis, Halifax House Price Index is projected to grow by 10%.

Traders will also keep an eye on the developments in U.S. government bond markets. The yield of 10-year Treasuries is currently trying to settle below the 50 EMA at 1.58%. In case this attempt is successful, the yield of 10-year Treasuries may gain additional downside momentum which may put more pressure on the U.S. dollar.

Technical Analysis

GBP/USD managed to get below the 20 EMA at 1.4135 and is moving towards the support level at 1.4100. RSI is in the moderate territory, and there is plenty of room to develop downside momentum in case the right catalysts emerge. If GBP/USD declines below the support at 1.4100, it will head towards the next support level at 1.4080.

It should be noted that GBP/USD has mostly traded between the support at 1.4080 and the resistance at 1.4200 in recent weeks, so a move below the support at 1.4080 will signal that GBP/USD will try to develop additional downside momentum.

If GBP/USD settles below 1.4080, it will head towards the next support level which is located near the 50 EMA at 1.4050.

On the upside, a move above the 20 EMA at 1.4135 will push GBP/USD towards the resistance at 1.4150. If GBP/USD gets above this level, it will move towards the next resistance at 1.4180. A successful test of this level will open the way to the test of the resistance at 1.4200.

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