GBP/USD Daily Forecast – British Pound Moves Higher Ahead Of The Weekend

British Pound Gains Some Ground Against U.S. Dollar

GBP/USD continues its attempts to settle above 1.3550 while U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index remains stuck near 96.25. In case the U.S. Dollar Index settles above this level, it will move towards the next resistance level at 96.50 which will be bearish for GBP/USD.

Yesterday, UK reported that Services PMI declined from 58.5 in November to 53.6 in December compared to analyst consensus of 53.2.

Today, foreign exchange market traders will focus on job market data from U.S. Non Farm Payrolls report is expected to show that U.S. economy added 400,000 jobs in December. Unemployment Rate is projected to decrease from 4.2% in November to 4.1% in December.

Meanwhile, Treasury yields continue to move higher, which may provide additional support to the American currency. The yield of 2-year Treasuries is currently trying to get above yearly highs near 0.88%. A move above this level will push the yield of 2-year Treasuries towards the 0.90% level which will be bullish for U.S. dollar.

Technical Analysis

GBP/USD is testing the resistance level at 1.3550. In case this test is successful, GBP/USD will move towards the next resistance level which is located at 1.3575. RSI remains in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

In case GBP/USD gets above the resistance at 1.3575, it will head towards the next resistance level at 1.3610. A move above this level will open the way to the test of the resistance at 1.3635.

On the support side, the nearest support level for GBP/USD is located at 1.3535. In case GBP/USD manages to settle back below this level, it will move towards the support at 1.3500.

A successful test of the support at 1.3500 will push GBP/USD towards the next support at 1.3460. If GBP/USD declines below this level, it will get to the test of the next support level at the 20 EMA at 1.3450.

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