GBP/USD Daily Forecast – British Pound Tries To Gain Ground Against U.S. Dollar

U.S. Dollar Is Losing Ground Against British Pound

GBP/USD is currently trying to settle back above 1.3665 while the U.S. dollar is losing some ground against a broad basket of currencies.

The U.S. Dollar Index is moving towards the nearest support level at 93.10. In case the U.S. Dollar Index manages to settle back below this level, it will head towards the next support near the 50 EMA at 92.80 which will be bullish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at Building Permits and Housing Starts reports from U.S. Analysts expect that Building Permits declined by 1.8% month-over-month in August after growing by 2.3% in July. Housing Starts are projected to increase by 2% on a month-over-month basis.

Trading may be choppy today as traders wait for the results of the Fed meeting which will be released tomorrow. Yesterday, global markets were under pressure on fears about a potential default of China’s developer Evergrande. However, U.S. dollar failed to gain more ground despite its safe-haven status as traders were not ready to make big moves ahead of the Fed meeting.

Technical Analysis

GBP/USD failed to settle below the support at 1.3635 and is trying to settle back above 1.3665. In case this attempt is successful, it will get to the test of the next support level at 1.3690.

A move above 1.3690 will open the way to the test of the resistance at 1.3710. If GBP/USD gets above this level, it will head towards the next resistance level at 1.3745. A successful test of the resistance at 1.3745 will push GBP/USD towards the resistance which is located at the 20 EMA at 1.3770.

On the support side, a move below 1.3665 will open the way to the test of the support at 1.3635. In case GBP/USD declines below this level, it will move towards the support at 1.3600. A successful test of the support at 1.3600 will push GBP/USD towards the support at 1.3575.

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