GBP/USD Daily Forecast – Resistance At 1.3140 Stays Strong

GBP/USD Video 06.11.20.

British Pound Is Losing Some Ground Against U.S. Dollar

GBP/USD is pulling back after yesterday’s rally while the U.S. dollar is trying to rebound against a broad basket of currencies.

The U.S. Dollar Index did not manage to settle below the nearest support at 92.50 and is trying to develop upside momentum. The nearest resistance level for the U.S. Dollar Index is located at 92.80. If the U.S. Dollar Index manages to settle above this level, it will head towards the next resistance at 93 which will be bearish for GBP/USD.

Yesterday, the Bank of England left the interest rate unchanged at 0.1% but expanded its quantitative easing program from 745 billion pounds to 895 billion pounds.

The U.S. Fed also left the interest rate unchanged and did not make any additional moves on the quantitative easing front.

The Fed continues to highlight the importance of containing the pandemic. The situation is developing in the wrong direction on this front since the U.S. has recently reported more than 110,000 new cases of the disease.

It remains to be seen whether problems on the coronavirus front will push investors to buy safe haven assets, including the U.S. dollar. The recent trading sessions were full of optimism, and the U.S. dollar remained under significant pressure as traders preferred riskier assets.

Technical Analysis

GBP/USD faced strong resistance near 1.3140 but continues its attempts to develop additional upside momentum. If GBP/USD manages to settle above this resistance level, it will head towards the next resistance near October highs at 1.3180.

A move above 1.3180 will open the way to the test of the resistance at 1.3270. There are no material levels between 1.3180 and 1.3270 so this move may be fast. In case GBP/USD settles above 1.3270, it will head towards the next resistance at 1.3325.

On the support side, GBP/USD will likely get some support near 1.3070. A move below this level will push GBP/USD towards the next support at the 20 EMA at 1.3010. The 50 EMA is in the nearby, and GBP/USD is set to receive material support in the area between 1.2980 and 1.3010.

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