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

GBP/USD Video 12.02.21.

U.S. Dollar Gains Ground Against British Pound

GBP/USD is currently testing the nearest support level at 1.3800 while the U.S. dollar is gaining some ground against a broad basket of currencies.

Yesterday, the U.S. Dollar Index made another attempt to settle below the support at 90.30 but failed to develop sufficient downside momentum. Currently, the U.S. Dollar Index is trying to settle above the nearest resistance level at 90.50. If this attempt is successful, the U.S. Dollar Index will head towards the next resistance at the 20 EMA at 90.65 which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the economic data from the UK. Analysts expect that UK fourth-quarter GDP increased by 0.5% on a quarter-over-quarter basis. On a year-over-year basis, GDP is projected to decline by 8.1%.

Industrial Production is projected to grow by 0.5% month-over-month in December, while Manufacturing Production is expected to increase by 0.6%. if the reports are stronger than expected, British pound may get more support.

Technical Analysis

GBP/USD managed to settle below 1.3835 and is trying to settle below the support level at 1.3800. If this attempt is successful, GBP/USD will head towards the next support level which is located at 1.3785.

In case GBP/USD declines below the support at 1.3785, it will move towards the major support level at 1.3745. Most likely, GBP/USD will need additional catalysts to settle below this level. If GBP/USD gets below the support at 1.3745, it will gain additional downside momentum and move towards the next support level which is located at the 20 EMA at 1.3725.

On the upside, the nearest resistance level for GBP/USD is located at 1.3835. If GBP/USD settles above this level, it will move towards the next resistance at 1.3875. GBP/USD made several attempts to get to the test of this level in recent trading sessions but failed to develop sufficient upside momentum. If GBP/USD gets above 1.3875, it will move towards the next resistance level at 1.3900.

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