GBP/USD Daily Forecast – British Pound Moves Higher At The Start Of The Week

GBP/USD Video 24.05.21.

British Pound Tries To Gain Ground Against U.S. Dollar

GBP/USD is currently trying to settle back above 1.4150 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the resistance at the 90 level and is moving lower. The nearest support level for the U.S. Dollar Index is located at 89.75. This support level has already been tested many times and proved its strength. In case the U.S. Dollar Index settles below this level, it will head towards the support at 89.50 which will be bullish for GBP/USD.

On Friday, UK reported that Manufacturing PMI increased from 60.9 in April to 66.1 in May compared to analyst consensus of 60.5. Services PMI improved from 61 to 61.8 compared to analyst consensus of 62. In the U.S., Manufacturing PMI increased from 60.5 to 61.5 while Services PMI improved from 64.7 to 70.1.

Strong PMI reports may boost inflation fears, but trading at U.S. government bond markets remains calm, and the yield of 10-year Treasuries has settled near 1.62%. Foreign exchange market traders will continue to monitor the developments in U.S. government bond markets as they may have a significant impact on currency dynamics.

Technical Analysis

 

GBP/USD is testing the resistance level at 1.4150. In case this test is succesful, GBP/USD will head towards the next resistance at 1.4180. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

A move above the resistance at 1.4180 will push GBP/USD towards the next resistance at 1.4200. In case GBP/USD settles above 1.4200, it will head towards the resistance at 1.4240.

On the support side, a move below 1.4150 will open the way to the test of the support level which is located at 1.4100. If GBP/USD declines below this level, it will head towards the next support at 1.4080. A successful test of this level will lead to a test of the support at the 20 EMA at 1.4070.

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