GBP/USD Daily Forecast – On The Move Towards The Next Resistance At 1.3200

GBP/USD Video 18.08.20.

British Pound Tries To Gain More Upside Momentum

GBP/USD  managed to get above the resistance level at 1.3110 as the U.S. dollar continues to lose ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to get to the test of the material support level at 92.50. Previously, the U.S. dollar made several attempts to get below this level but quickly rebounded above 93.

This time, the U.S. dollar has better chances to settle below this level amid continued uncertainty regarding the fate of the new U.S. coronavirus aid package.

Today, traders will digest data on U.S. Housing Starts and Building Permits in July. Analysts expect that Housing Starts and Building Permits will show growth of about 5%. In case the housing data is worse than expected, the U.S. Dollar Index may slide below the support at 92.50, pushing GBP/USD to new highs.

There are no important economic releases in the UK today but traders may already start positioning themselves for yesterday’s inflation data.

UK Inflation Rate is expected to be 0.0% on a month-over-month basis while showing growth of 0.6% on a year-over-year basis. Core Inflation Rate is projected to grow by 1.3% on a year-over-year basis.

Technical Analysis

GBP/USD has settled above the nearest resistance level at 1.3110 and is trying to get more upside momentum. RSI is still far from its recent highs, and there is plenty of room to gain momentum in case the right catalysts emerge.

The next resistance level for GBP/USD is located near the recent highs 1.3200. In case GBP/USD gets above this level, it will head towards the next material resistance level near 1.3300.

I’d note that GBP/USD made an attempt to settle above 1.3300 at the end of 2019 but met significant resistance and quickly pulled back below this level.

On the support side, the previous resistance at 1.3110 will likely serve as the first material support level for GBP/USD.

In case GBP/USD moves below 1.3110, it will head towards the next support near the 20 EMA at 1.3010. A move below the 20 EMA will signal that the current upside momentum has come to an end.

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