GBP/USD Daily Forecast – British Pound Tries To Rebound After Sell-Off

GBP/USD Video 29.12.20.

U.S. Dollar Is Losing Ground Against British Pound

GBP/USD is currently trying to get back above 1.3500 while the U.S. dollar is losing ground against a broad basket of currencies.

Yesterday, the U.S. Dollar Index made an attempt to get to the test of the resistance at 90.50 but failed to gain sufficient upside momentum. Currently, the U.S. Dollar Index is moving towards the support at the 90 level. If the U.S. Dollar Index manages to get below the 90 level, GBP/USD will get more support.

There are no important economic reports scheduled to be released in the U.S. and UK today so foreign exchange market traders will focus on Brexit, U.S. stimulus and the latest developments on the coronavirus front.

Yesterday, U.S. House of Representatives approved $2,000 stimulus checks which were demanded by Trump. However, the measure must get through the Senate which is controlled by Republicans, and it remains to be seen whether they are ready to boost spending.

On Monday, Britain reported 41,385 new COVID-19 cases, which was a new daily record. The new, more infectious strain of coronavirus may put additional pressure on the British economy.

Technical Analysis

GBP/USD is currently testing the nearest resistance level at 1.3485. the next resistance is located at 1.3500. In case GBP/USD manages to settle above this resistance level, it will gain some upside momentum and head towards the next resistance at 1.3540. A move above 1.3540 will push GBP/USD towards the resistance at 1.3575.

On the support side, the nearest support level for GBP/USD is located at the 20 EMA at 1.3440. If GBP/USD declines below this level, it will head towards the next support at 1.3400.

A move below the support at 1.3400 will open the way to the test of the next support level at the 50 EMA at 1.3330. There are no important levels between 1.3330 and 1.3400 so this move may be fast.

From a big picture poing of view, GBP/USD faced serious resistance in the 1.3575 – 1.3625 area, and it will need significant upside catalysts to move higher.

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