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

GBP/USD Video 05.05.21.

Another Test Of Resistance At 1.3900

GBP/USD is currently testing the resistance at 1.3900 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle above the resistance at the 20 EMA at 91.35. This resistance level has already been tested many times and proved its strength. In case the U.S. Dollar Index manages to get above this level, it will move towards the 50 EMA at 91.50 which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the economic data from the U.S. ADP Employment Change report is projected to show that private businesses created 800,000 jobs in April. The final reading of Services PMI report for April is projected to show that Services PMI increased from 60.4 in March to 63.1 in April.

Traders will also keep an eye on the developments in U.S. government bond markets after yesterday’s Yellen comments about inflation which put significant pressure on tech stocks. Bond markets managed to stay calm, and the yield of 10-year Treasuries remains below the 20 EMA at 1.61%. If Treasury yields start to move higher on inflation fears, U.S. dollar may get more support.

Technical Analysis

GBP/USD continues its attempts to settle above the resistance at 1.3900. If GBP/USD manages to settle above this level, it will move towards the resistance at 1.3920.

A move above the resistance at 1.3920 will open the way to the test of the resistance at 1.3950. In case GBP/USD manages to settle above this level, it will head towards the next resistance at 1.3980. A successful test of this level will open the way to the test of the resistance at 1.4000.

On the support side, the nearest support level for GBP/USD is located at the 20 EMA at 1.3870. If GBP/USD declines below the 20 EMA, it will move towards the support at the 50 EMA at 1.3845. A move below this 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.