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

GBP/USD Video 20.05.21.

U.S. Dollar Is Mostly Flat Against British Pound

GBP/USD is currently trying to get back above 1.4120 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index received strong support near 89.75 and moved back above the 90 level. The nearest resistance for the U.S. Dollar Index is located at 90.30. If the U.S. Dollar Index manages to settle above this level, it will head towards the next resistance at 90.50 which will be bearish for GBP/USD.

U.S. dollar got a boost after FOMC Minutes indicated that the Fed may start discussions about the pace of its asset purchase program in the upcoming meetings in case the economy continues to rebound at a robust pace.

Today, foreign exchange market traders will focus on employment data from U.S. Analysts expect that Initial Jobless Claims report will show that 450,000 Americans filed for unemployment benefits in a week. Continuing Jobless Claims are projected to decline from 3.66 million to 3.64 million.

Technical Analysis

GBP/USD did not manage to settle below 1.4100 and is trying to settle back above 1.4120. RSI is in the moderate territory, and there is plenty of room to gain upside momentum.

If GBP/USD settles above 1.4120, it will head towards the next resistance level which is located at 1.4150. A successful test of this level will open the way to the test of the resistance at 1.4180. In case GBP/USD gets above 1.4180, it will move towards the next resistance level which has recently emerged at 1.4200.

On the support side, GBP/USD needs to settle below 1.4100 to have a chance to continue the recent pullback. The next support level for GBP/USD is located at 1.4080.

If GBP/USD declines below this level, it will head towards the support which is located at the 20 EMA at 1.4040. A move below the 20 EMA will open the way to the test of the support at 1.4020. In case GBP/USD manages to settle below this level, it will head towards the next support at 1.4000.

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