GBP/USD Daily Forecast – Flat Ahead Of The WeekendGBP/USD failed to gain momentum and remains in the range between 1.3010 and 1.3110.
GBP/USD Video 14.08.20.
All Eyes On U.S. Retail Sales Report
GBP/USD is little changed ahead of the weekend amid continued uncertainty over the new U.S. coronavirus aid package and rising U.S. government bond yields.
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, is flat near 93.20. Yesterday, the U.S. Dollar Index made an attempt to settle below the 93 level.
If this attempt was successful, the U.S. dollar would have gained more downside momentum, pushing GBP/USD higher. However, rising U.S. government bond yields have provided sufficient support to the American currency, and the U.S. Dollar Index returned back above the 93 level.
Today, traders will focus on the upcoming U.S. Retail Sales report. Analysts expect that Retail Sales have increased by 1.9% month-over-month in July.
Any softness in Retail Sales may put additional pressure on the American currency, especially in the light of the country’s failure to come up with a new stimulus package.
In addition to Retail Sales, traders will also digest Industrial Production and Manufacturing Production reports for July. Both Industrial Production and Manufacturing Production are projected to grow by 3% on a month-over-month basis.
GBP/USD continues to trade in a range between the support level at 1.3010 and the resistance level at 1.3110. Yesterday, GBP/USD made an attempt to get above the resistance at 1.3110 but failed to gain sufficient upside momentum and returned back into the range.
Both the support level and the resistance level look strong so GBP/USD will need significant catalysts to get out of the range and establish a new trend.
On the upside, a move above 1.3110 will open the way to the test of the next resistance level at the recent highs at 1.3200. GBP/USD failed to settle above 1.3200 at the beginning of the year so this resistance is set to be strong.
In case GBP/USD gets below the support level at 1.3010, it will head towards the next support at the recent lows near the 20 EMA at 1.2980. A move below this level will lead to increased downside momentum, and GBP/USD will head towards the next support level at 1.2900.
For a look at all of today’s economic events, check out our economic calendar.