GBP/USD Daily Forecast – British Pound Tries To Gain More Upside MomentumGBP/USD has settled above the 50 EMA at 1.2450 but faced material resistance at 1.2530.
GBP/USD Video 03.07.20.
Riskier Assets Enjoy Support After Better-Than-Expected U.S. Employment Reports
GBP/USD continues to trade above the 50 EMA at 1.2450 as riskier assets remain supported by positive U.S. jobs data that was released yesterday.
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U.S. Non Farm Payrolls report showed that the economy added 4.8 million jobs. The report was much better than the analyst consensus of 3 million. Meanwhile, Unemployment Rate declined from 13.3% to 11.1% as the economy continued to reopen and more workers were able to find new jobs.
Continuing Jobless Claims stayed high at 19.3 million which is worrisome but markets focused on the blowout Non Farm Payrolls report and supported riskier assets like the British pound.
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, continues to trade in the 97 – 97.5 range. A move out of this range will lead to increased momentum in GBP/USD but so far the American currency has failed to develop such momentum.
The U.S. has recorded more than 55,000 new coronavirus cases on Thursday which is a new world record. It remains to be seen whether this data will provide support to the U.S. dollar which continues to serve as a safe haven asset of last resort or markets will ignore virus risks and focus on the improving economic data.
GBP/USD stays above the 20 EMA and the 50 EMA and continues its attempts to gain more upside momentum.
The nearest resistance is located near 1.2530. This resistance level has already been tested several times and proved its strength. In case GBP/USD gets above this resistance level, it will head towards the high end of the current trading range at 1.2650.
On the support side, the 20 EMA and the 50 EMA at 1.2450 serve as the first major support level for GBP/USD. If GBP/USD manages to settle below the 50 EMA, it will get back to the downside mode and head towards the next support level at 1.2350.
GBP/USD continues to be very volatile in the wide trading range between 1.2250 and 1.2650. Inside this range, GBP/USD can change its local trend very quickly so traders should stay alert and be prepared for fast moves.
For a look at all of today’s economic events, check out our economic calendar.