GBP/USD Daily Forecast – British Pound Pulls Back Against U.S. Dollar

U.S. Dollar Tries To Move Higher Against British Pound

GBP/USD is currently trying to stay above the resistance at 1.3800 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index failed to settle below 92.50 and moved closer to 92.70. The nearest resistance level for the U.S. Dollar Index is located at 92.80. If the U.S. Dollar Index manages to settle above this level, it will move towards the resistance at 93.10 which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the economic data from U.S. Analysts expect that Durable Goods Orders increased by 2.1% month-over-month in June after growing by 2.3% in May.

Case-Shiller Home Price Index is projected to grow by 16.4% year-over-year in May, while CB Consumer Confidence is expected to decline from 127.3 in June to 123.9 in July.

Traders will also continue to monitor the developments in U.S. government bond markets. The yield of 10-year Treasuries has recently made several attempts to settle above 1.30% but failed to develop sufficient upside momentum. A move above this level will indicate that demand for safe-haven assets continues to decrease, although higher yields may provide some support to the American currency.

Technical Analysis

GBP/USD faced resistance near 1.3835 and pulled back closer to the 20 EMA which is located at 1.3800. In case GBP/USD settles below the 20 EMA, it will gain additional downside momentum and head towards the support at 1.3780.

A successful test of the support at 1.3780 will open the way to the test of the next support at 1.3745. In case GBP/USD declines below this level, it will move towards the next support at 1.3710.

On the upside, the nearest resistance level for GBP/USD is located at 1.3835. If GBP/USD gets above this level, it will continue its rebound and head towards the resistance at the 50 EMA at 1.3870.

A move above the 50 EMA will push GBP/USD towards the resistance at 1.3900. In case GBP/USD manages to settle above this level, it will move towards the resistance at 1.3920.

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