GBP/USD Daily Forecast – British Pound Remains Under Pressure

GBP/USD Video 28.01.21.

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

GBP/USD is currently testing the support level at 1.3665 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index is trying to get above the nearest resistance level at the 50 EMA at 90.80. If this attempt is successful, the U.S. Dollar Index will move towards the next resistance level at 91.10 which will be bearish for GBP/USD.

Yesterday, the U.S. Fed left the rate unchanged and stated that it would continue to support the economy as long as necessary. Fed’s comments had little impact on the dollar which continued to move higher against a broad basket of currencies.

Today, foreign exchange market traders will have a chance to take a look at the fourth-quarter GDP data from the U.S. Analysts expect that U.S. fourth-quarter GDP grew by 4% quarter-over-quarter.

The U.S. will also release Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims are projected to decrease to 875,000 while Continuing Jobless Claims are expected to remain unchanged at 5.05 million.

Technical Analysis

GBP/USD settled below the support level at 1.3710 and is trying to settle below the next support at 1.3665. RSI is in the moderate territory, and there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

If GBP/USD declines below the support at 1.3665, it will move towards the next support level which is located at the 20 EMA at 1.3640. A successful test of the support at the 20 EMA will open the way to the test of the support level at 1.3575. No material levels were formed between 1.3575 and the 20 EMA at 1.3640 so this move may be fast.

On the upside, the previous support level at 1.3710 will likely serve as the first resistance level for GBP/USD. In case GBP/USD manages to settle above this level, it will head towards the next resistance at the recent highs at 1.3745. A move above this level will push GBP/USD towards the resistance at 1.3785.

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