GBP/USD Daily Forecast – British Pound Moves Lower Against U.S. Dollar

U.S. Dollar Gains Ground Against British Pound

GBP/USD managed to get below 1.3835 and is moving towards the 50 EMA which is located near 1.3820 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to get above the 20 EMA at 92.60. If the U.S. Dollar Index manages to settle above the 20 EMA, it will head towards the resistance at 92.80 which will be bearish for GBP/USD.

There are no important economic reports scheduled to be released in the UK today so foreign exchange market traders will focus on the economic data from U.S.

Analysts expect that Retail Sales declined by 0.8% month-over-month in August after falling by 1.1% in July. Initial Jobless Claims report is projected to show that 330,000 Americans filed for unemployment benefits in a week. Continuing Jobless Claims are projected to remain unchanged at 2.78 million.

Traders will also monitor the developments in U.S. government bond markets as the yield of 10-year Treasuries is trying to settle above the 20 EMA at 1.31%. In case this attempt is successful, it will head towards the 50 EMA at 1.33% which may provide additional support to the U.S. dollar.

Technical Analysis

GBP/USD is currently trying to get below the 50 EMA which is located near 1.3820. The next support level for GBP/USD is located at the 20 EMA at 1.3810.

In case GBP/USD manages to settle below the 20 EMA at 1.3810, it will gain additional downside momentum and get to the test of the support at 1.3800. A move below this level will open the way to the test of the support at 1.3780.

On the upside, GBP/USD needs to settle above the resistance at 1.3835 to have a chance to gain upside momentum in the near term. The next resistance level is located at 1.3865.

If GBP/USD gets above the resistance at 1.3865, it will move towards the next resistance at 1.3880. A move above this level will push GBP/USD towards the resistance at 1.3900.

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