GBP/USD Daily Forecast – Resistance At 1.2750 In Sight

GBP/USD Video 08.06.20.

British Pound Tries To Continue The Upside Move

GBP/USD is trying to settle above 1.2700 as riskier currencies are supported by the surprisingly good U.S. Non Farm Payrolls and Unemployment Rate reports which were published on Friday.

There are no important economic reports scheduled to be released today so GBP/USD dynamics will depend on technicals and general market mood.

The U.S. dollar is flat against a broad basket of currencies, and the U.S. Dollar Index has settled near 97. Recently, the U.S. Dollar Index tried to settle below 96.5 but the downside momentum eased a bit.

This week, GBP/USD trading will be impacted by Fed Interest Rate Decision on Wednesday and the U.S. Initial Jobless Claims report on Thursday. The Initial Jobless Claims report is especially interesting following the surprising decline in the Unemployment Rate in May.

In the UK, traders will have to digest data on GDP Growth, Industrial Production and Manufacturing Production for April which is scheduled to be released on Friday. The reports are guaranteed to look grim but traders will look for signs of the upcoming recovery.

Technical Analysis

GBP/USD managed to get above the major resistance at 1.2650 and tries to continue the upside move. Currently, GBP/USD is trying to settle above 1.2700.

If this attempt is successful, GBP/USD will head towards the next resistance level at 1.2750. GBP/USD has already tried to test this level but met resistance just below 1.2750.

If the test of this level is successful, GBP/USD will gain additional upside momentum and head towads the test of the next resistance level at 1.2830. A move above 1.2830 will open the way to the next resistance level at 1.2970.

I’d note that RSI is at rather high levels so there is a material chance for a pullback after the major upside move.

On the support side, the nearest support for GBP/USD is located at the previous major resistance at 1.2650. In case GBP/USD moves below this level, it will head towards the next support level at 1.2500. There are no material levels between 1.2500 and 1.2650 so a pullback towards 1.2500 may happen quickly in case GBP/USD settles below 1.2650.

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