GBP/USD Daily Forecast – British Pound Tries To Rebound

GBP/USD Video 02.02.21.

British Pound Moves Higher Against U.S. Dollar

GBP/USD received support near 1.3665 and is trying to rebound while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the resistance at the 50 EMA at 90.80. The next resistance level for the U.S. Dollar Index is located at 91.10. If the U.S. Dollar Index settles above this level, it will gain additional upside momentum which will be bearish for GBP/USD.

Yesterday, UK reported that Manufacturing PMI declined from 57.5 in December to 54.1 in January compared to analyst consensus of 52.9. In the U.S., Manufacturing PMI increased from 57.1 to 59.2 compared to analyst consensus of 59.1.

Today, foreign exchange market traders will have a chance to take a look at UK Nationwide Housing Prices data for January. Analysts expect that Nationwide Housing Prices increased by 0.3% month-over-month after growing by 0.8% in December. On a year-over-year basis, Nationwide Housing Prices are projected to increase by 6.9%.

Technical Analysis

GBP/USD failed to settle below the nearest support level at 1.3665 and is trying to rebound. The nearest resistance level for GBP/USD is located at 1.3710. In case GBP/USD manages to settle above this level, it will head towards the major resistance level at 1.3745.

This resistance level has already been tested many times and proved its strength so GBP/USD will need additional catalysts to settle above 1.3745. If GBP/USD gets above this level, it will head towards the next resistance level at 1.3785.

On the support side, the nearest support level for GBP/USD is located near the 20 EMA at 1.3665. If GBP/USD declines below this level, it will gain downside momentum and move towards the next support level 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 at 1.3575. No material levels were formed between 1.3575 and 1.3625 so this move may be fast. The 50 EMA is located near 1.3575 so GBP/USD will likely get significant support at this level.

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