GBP/USD Daily Forecast – British Pound Pulls Back On Brexit Uncertainty

GBP/USD Video 12.11.20.

British Pound Continues To Move Lower Against U.S. Dollar

GBP/USD is trying to settle below 1.3200 as the U.S. dollar continues to gain ground against a broad basket of currencies.

The U.S. Dollar Index has managed to settle above the resistance at the 93 level and made an attempt to get above the next resistance at the 20 EMA at 93.15. This attempt yielded no results but the U.S. Dollar Index looks ready for another test of this level. In case it gets above the 20 EMA, the U.S. Dollar Index will move towards the next resistance at the 50 EMA at 93.40 which will be bearish for GBP/USD.

The British pound is under some pressure as Brexit deadline has been extended once again. EU and UK should reach a deal by November 19, or Britain will leave without a deal. As always, there is a chance that negotiations will get another extension, although time is really running out for EU and UK to get a compromise deal.

Soon, GBP/USD traders will have a chance to evaluate the latest economic data from the UK. Third-quarter GDP is projected to grow by 15.8% quarter-over-quarter but remain down by 9.4% on a year-over-year basis.

Analysts expect that Industrial Production report for September will show growth of 0.8% on a month-over-month basis, while Manufacturing Production is expected to increase by 1%.

Technical Analysis

GBP/USD has managed to get below the support at 1.3210 and is moving towards the next support level at 1.3180. If GBP/USD settles below this level, it will gain additional downside momentum and head towards the next support level at 1.3140.

A move below 1.3140 will open the way to the test of the support level near the 20 EMA at 1.3100.

On the upside, the previous support at 1.3210 may serve as the first resistance level for GBP/USD. If GBP/USD moves above this level, it will head towards the next resistance level at 1.3270.

In case GBP/USD manages to get above 1.3270, it will try to get to the test of the next resistance at 1.3325. The recent attempt to test this level was stopped just under 1.3315, but the next attempt may have better chances for success.

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