GBP/USD Daily Forecast – British Pound Remains Weak Against U.S. Dollar

British Pound Is Losing Ground Against U.S. Dollar

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

The U.S. Dollar Index managed to settle above the 50 EMA at 92.40 and is testing the next resistance at the 20 EMA at 92.60. In case this test is successful, the U.S. Dollar Index will head towards the next resistance level at 92.80 which will be bearish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at JOLT’s job openings report from the U.S., although it remains to be seen whether this report will have any impact on currency dynamics.

Meanwhile, traders will monitor the developments in U.S. government bond markets. Yesterday, the yield of 10-year Treasuries made an attempt to settle above August highs near 1.38% but failed to develop sufficient upside momentum and pulled back. A move above this level will push the yield of 10-year Treasuries towards 1.42% which should provide more support to the American currency.

Technical Analysis

GBP/USD managed to get below the support level at 1.3780 and is moving towards the next support level which is located at 1.3745. RSI remains 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 1.3745, it will head towards the next support level at 1.3710. A successful test of this level will open the way to the test of the support at 1.3690. If GBP/USD manages to settle below the support at 1.3690, it will continue its downside move and head towards the support at 1.3665.

On the upside, the previous support level at 1.3780 will serve as the first resistance level for GBP/USD. A move above this level will push GBP/USD towards the resistance at 1.3800, although it can also face resistance at the 20 EMA near 1.3790. If GBP/USD gets back above 1.3800, it will get to the test of the 50 EMA near 1.3810.

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