GBP/USD Daily Forecast – British Pound Pulls Back Ahead Of The Weekend

U.S. Dollar Gains Some Ground Against British Pound

GBP/USD is moving towards the support at 1.3745 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has managed to stay above 92.80 and is slowly moving towards the 93 level. In case the U.S. Dollar Index gets above this level, it will continue its upside move and get to the test of the resistance at 93.10 which will be bearish for GBP/USD.

UK has recently reported that Retail Sales increased by 0.5% month-over-month in June compared to analyst consensus which called for growth of 0.4%. On a year-over-year basis, Retail Sales increased by 9.7%.

UK has also released Consumer Confidence report which indicated that Consumer Confidence improved from -9 in June to -7 in July compared to analyst consensus of -8.

Today, foreign exchange market traders will also have a chance to take a look at flash PMI reports for July. Analysts expect that UK Manufacturing PMI declined from 63.9 in June to 62.5 in July. UK Services PMI is projected to decrease from 62.4 to 62. Numbers above 50 show expansion.

Technical Analysis

GBP/USD did not manage to settle above the resistance at 1.3780 and pulled back closer to the support at 1.3745. In case GBP/USD declines below this support level, it will move towards the next support which is located at 1.3710.

A successful test of the support at 1.3710 will open the way to the test of the next support at 1.3670. If GBP/USD declines below 1.3670, it will head towards the support at 1.3635.

On the upside, the nearest resistance level for GBP/USD is still located at 1.3780. A move above this level will lead to a test of the resistance which is located at the 20 EMA at 1.3800.

If GBP/USD manages to settle above 1.3800, it will gain additional upside momentum and head towards the resistance at 1.3835. A successful test of this level will push GBP/USD towards the resistance at 1.3865.

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