GBP/USD Daily Forecast – Resistance At 1.3600 Stays Strong

U.S. Dollar Is Mostly Flat Against British Pound

GBP/USD continues its attempts to get above 1.3600 while U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below the 96 level and is slowly moving towards 95.75. In case the U.S. Dollar Index gets to the test of this level, GBP/USD will get more support.

Today, UK released BRC Retail Sales Monitor for December which increased by 0.6% year-over-year compared to analyst forecast which called for growth of 1.5%.

Later, foreign exchange market traders will focus on Fed Chair Jerome Powell’s testimony. The yield of 2-year Treasuries continues to move higher at a robust pace as traders prepare for a series of rate hikes in 2022. It looks that the market is ready to price in as much as 4 rate hikes this year.

Interestingly, the U.S. dollar remains range-bound against a broad basket of currencies, and it remains to be seen whether Powell’s testimony will serve as a material catalyst for the American currency.

Technical Analysis

GBP/USD faced material resistance near 1.3600 in recent trading sessions. In case GBP/USD manages to settle above this level, it will move towards the next resistance which is located at 1.3635. RSI remains in the moderate territory, and there is enough room to gain additional momentum in case the right catalysts emerge.

A move above 1.3635 will push GBP/USD towards the resistance at 1.3665. In case GBP/USD settles above the resistance at 1.3665, it will head towards the next resistance at 1.3700.

On the support side, the nearest support level for GBP/USD is located at 1.3575. If GBP/USD declines below this level, it will head towards the support at 1.3550. A successful test of the support at 1.3550 will push GBP/USD towards the support at 1.3535. In case GBP/USD moves below 1.3535, it will head towards the support level which is located at 1.3515.

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