GBP/USD Daily Forecast – British Pound Tries To Gain More Ground

GBP/USD Video 05.02.21.

British Pound Continues Its Rebound

GBP/USD is currently trying to settle above the resistance at 1.3685 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 91.50. RSI is still in the moderate territory after the recent upside move, so there is plenty of room to gain additional momentum in case the right catalysts emerge. If the U.S. Dollar Index manages to settle above 91.50, it will head towards the resistance at 91.75 which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the latest employment data from the U.S. Non Farm Payrolls report is expected to show that the economy added 50,000 jobs in January. Meanwhile, Unemployment Rate is projected to remain unchanged at 6.7%.

Yesterday, Initial Jobless Claims report indicated that 779,000 Americans filed for unemployment benefits in a week compared to analyst consensus of 830,000. The recent ADP Employment Change report was also better than expected, and it looks like the situation in the U.S. job market is improving, which provides support to the American currency.

Technical Analysis

GBP/USD managed to get above the 20 EMA which is located near 1.3665 and is trying to develop additional upside momentum. The next resistance level for GBP/USD is located at 1.3710.

If GBP/USD settles above this level, it will head towards the next resistance at the recent highs at 1.3745. A move above 1.3745 will push GBP/USD towards the resistance at 1.3785.

On the support side, the previous resistance at 1.3665 will likely serve as the first support level for GBP/USD. If GBP/USD manages to settle below this level, it will head towards the next support at 1.3625. A successful test of the support at 1.3625 will open the way to the test of the next support level which is located near the 50 EMA at 1.3575.

The 50 EMA served as a major support level during yesterday’s trading session, and I’d expect a lot of interest from traders in case GBP/USD gets to another test of the support at 1.3575.

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