GBP/USD Daily Forecast – British Pound Moves Higher In Holiday-Thinned Trade

GBP/USD Video 02.04.21.

British Pound Gains Ground Against U.S. Dollar

GBP/USD is currently trying to settle above the 20 EMA at 1.3830 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below the support at the 93 level and is moving lower. The next support level for the U.S. Dollar Index is located at 92.70. If the U.S. Dollar Index gets to the test of this level, GBP/USD will get additional support.

Yesterday, UK reported that Manufacturing PMI increased from 55.1 in February to 58.9 in March compared to analyst consensus of 57.9. U.S. Manufacturing PMI report was also stronger than expected as Manufacturing PMI grew from 58.6 to 59.1 compared to analyst consensus of 59.

Today, foreign exchange market traders will focus on the job market data from the U.S. Analysts expect that Non Farm Payrolls report will indicate that the U.S. economy added 647,000 jobs in March after adding 379,000 jobs in February. Unemployment Rate is projected to decline from 6.2% to 6%.

Technical Analysis

GBP/USD managed to get above the 20 EMA at 1.3830 and is moving towards the next resistance level which is located at 1.3865. RSI is in the moderate territory, and there is plenty of room to gain additional momentum in case the right catalysts emerge.

In case GBP/USD settles above the resistance at 1.3865, it will head towards the next resistance at 1.3900. A move above the resistance at 1.3900 will open the way to the test of the resistance at 1.3950. There are no material levels between 1.3900 and 1.3950 so this move may be fast.

On the support side, the previous resistance at the 20 EMA at 1.3830 will likely serve as the first support level for GBP/USD. The next support is located at the 50 EMA at 1.3820. In case GBP/USD declines below the 50 EMA, it will head towards the support at 1.3800. A successful test of the support at 1.3800 will push GBP/USD towards the support at 1.3780.

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