GBP/USD Daily Forecast – British Pound Starts The Week On A Strong Note

GBP/USD Video 26.04.21.

British Pound Gains Ground Against U.S. Dollar

GBP/USD is currently trying to settle above the resistance at 1.3900 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index managed to settle below the support at the 91 level and is testing the next support at 90.70. In case this test is successful, the U.S. Dollar Index will move towards the support at 90.50 which will be bullish for GBP/USD.

On Friday, UK reported that Manufacturing PMI increased from 58.9 in March to 60.7 in April compared to analyst consensus of 59. Services PMI improved from 56.3 to 60.1 compared to analyst consensus of 59.

In the U.S., Manufacturing PMI grew from 59.1 to 60.6 compared to analyst consensus of 60.5 while Services PMI increased from 60.4 to 63.1.

Better-than-expected PMI reports boosted demand for riskier currencies and provided support to GBP/USD. Today, riskier currencies remain strong as foreign exchange market traders continue to bet on the robust rebound of economic activity despite problems on the coronavirus front.

Technical Analysis

GBP/USD managed to settle above the resistance at 1.3865 and is testing the next resistance level at 1.3900. In case GBP/USD settles above the resistance at 1.3900, it will head towards the next resistance level which is located at 1.3920.

A successful test of this level will open the way to the test of the resistance at 1.3950. If GBP/USD gets above the resistance at 1.3950, it will move towards the resistance at 1.3980. A move above this level will push GBP/USD towards the major resistance level at 1.4000.

On the support side, the previous resistance at 1.3865 will serve as the first support level for GBP/USD. A move below this level will open the way to the test of the support at the 20 EMA at 1.3850.

In case GBP/USD gets below the 20 EMA, it will head towards the next support which is located at the 50 EMA at 1.3830. A successful test of this support level will push GBP/USD towards the support at 1.3800.

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