GBP/USD Daily Forecast – Resistance At 1.3600 Stays Strong

British Pound Pulls Back Against U.S. Dollar

GBP/USD faced resistance at 1.3600 and pulled back while the U.S. dollar gained some ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle below the support at 93.75 and rebounded towards the resistance at the 94 level. In case the U.S. Dollar Index manages to settle above this level, it will move towards the resistance at 94.20 which will be bearish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at the final reading of UK Services PMI report for September. Analysts expect that UK Services PMI declined from 55 in August to 54.6 in September. In the U.S., Services PMI is projected to decrease from 55.4 to 54.5.

Traders will also continue to monitor the developments in U.S. government bond markets. The yield of 10-year Treasuries continues its attempts to settle above the psychologically important resistance level at 1.50%. In case the yield of 10-year Treasuries manages to settle above this level, it will gain upside momentum and move towards the recent highs at 1.56% which will be bullish for the U.S. dollar.

Technical Analysis

GBP/USD failed to settle above the resistance level at 1.3600 and is trying to develop downside momentum. In case this attempt is successful, it will get to the test of the support at 1.3575.

A successful test of this support level will open the way to the test of the next support at 1.3550. If GBP/USD settles below this level, it will move towards the next support which is located at 1.3520. A move below 1.3520 will push GBP/USD towards the support at 1.3490.

On the upside, GBP/USD needs to settle above 1.3600 to continue its rebound. The next resistance level is located near the 20 EMA at 1.3635. In case GBP/USD manages to settle above the 20 EMA, it will head towards the resistance at 1.3665. A successful test of this level will open the way to the test of the next resistance which is located at 1.3690.

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