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

U.S. Dollar Is Losing Ground Against British Pound

GBP/USD continues its attempts to settle above the resistance at 1.3835 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index managed to settle below the 20 EMA at 92.60 and is trying to settle below the next support level which is located at the 50 EMA at 92.45. It has already made several attempts to move below this level but failed to develop sufficient downside momentum. In case the U.S. Dollar Index declines below the 50 EMA, it will move towards the support at 92.30 which will be bullish for GBP/USD.

UK has just reported that Industrial Production increased by 1.2% month-over-month in July compared to analyst consensus which called for growth of just 0.4%. On a year-over-year basis, Industrial Production grew by 3.8%. Meanwhile, Manufacturing Production increased by 6% year-over-year, in line with the analyst consensus.

Today, foreign exchange market traders will also have a chance to take a look at Producer Prices data from U.S. Analysts expect that Producer Prices increased by 0.6% month-over-month in August. On a year-over-year basis, Producer Prices are projected to grow by 8.2%.

Technical Analysis

GBP/USD is currently trying to settle above the resistance at 1.3835. In case this attempt is successful, GBP/USD will get to another test of the next resistance level at 1.3865.

A move above the resistance at 1.3865 will open the way to the test of the resistance at 1.3880. If GBP/USD manages to settle above the resistance at 1.3880, it will get to the test of the next resistance level which is located near September highs at 1.3900.

On the support side, a move below 1.3835 will push GBP/USD towards the support at the 50 EMA at 1.3815. In case GBP/USD declines below the 50 EMA, it will head towards the support at the 20 EMA at 1.3800. A successful test of the support at the 20 EMA will push GBP/USD towards the next support level which is located at 1.3780.

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