GBP/USD Daily Forecast – Resistance At 1.3180 In Sight
GBP/USD Video 22.10.20.
Traders Remain Focused On Brexit And U.S. Stimulus Talks
GBP/USD is trying to continue its upside move while the U.S. dollar is gaining ground against a broad basket of currencies.
Yesterday, GBP/USD rallied on hopes for a Brexit deal. Traders believe that EU and UK will intensify their negotiations and reach a compromise deal in the upcoming weeks.
Meanwhile, the U.S. Dollar Index remained volatile as traders evaluated the chances of a new U.S. stimulus deal. The U.S. Dollar Index tested the support level at 92.50 but rebounded closer to the nearest resistance at 92.80 after U.S. President Donald Trump accused Democrats of not willing to compromise.
In addition to U.S. stimulus talks and Brexit chatter, traders will focus on U.S. employment reports. U.S. Initial Jobless Claims are expected to decline from 898,000 to 860,000 while Continuing Jobless Claims are projected to decrease from 10.02 million to 9.5 million.
Recent reports indicated that U.S. job market recovery has stalled, and it remains to be seen whether Initial Jobless Claims will stay below 900,000.
GBP/USD managed to settle above the resistance at 1.3110 and is trying to continue its upside move. The next resistance level for GBP/USD has emerged near 1.3180.
If GBP/USD settles above this level, it will head towards the next resistance at 1.3270. RSI is in the moderate territory despite the strength of the recent upside move so there is plenty of room to gain additional momentum in case the right catalysts emerge.
I’d note that there are no significant levels between 1.3180 and 1.3270 so GBP/USD may quickly get to the test of the resistance at 1.3270 if it manages to settle above 1.3180. In case GBP/USD moves above 1.3270, it will head towards the resistance level at 1.3320.
On the support side, the previous resistance level at 1.3110 will likely serve as the first support level for GBP/USD. A move below this level will open the way to the test of the next support at 1.3070. If GBP/USD declines below 1.3070, it will head towards the support at 1.3030.
For a look at all of today’s economic events, check out our economic calendar.