GBP/USD Daily Forecast – Resistance At 1.3710 In Sight

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Updated: Jan 4, 2021, 07:33 UTC

GBP/USD settled above the resistance at 1.3665 and is trying to get to the test of the next resistance level at 1.3710.

British Pound Moves Higher Against U.S. Dollar At The Start Of The Week

GBP/USD managed to get above the resistance at 1.3665 and made an attempt to settle above 1.3700 while the U.S. dollar remained under pressure against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the nearest resistance at the 90 level and is currently trying to settle below the support at 89.75. If this attempt is successful, the U.S. Dollar Index will move towards the next support level at the recent lows at 89.55 which will be bullish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at the final readings of Manufacturing PMI reports for December. Analysts expect that UK Manufacturing PMI will increase from 55.6 in November to 57.3 in December. In the U.S., Manufacturing PMI is projected to decline from 56.7 to 56.5. Numbers above 50 show expansion.

The U.S. dollar gained strong downside momentum at the end of 2020 and remains under pressure at the beginning of 2021. At this point, the American currency will likely need significant upside catalysts to break this trend.

Technical Analysis

GBP/USD managed to get above the resistance at 1.3665 and is trying to develop additional upside momentum. RSI remains in the moderate territory so there is plenty of room to gain momentum in case the right catalysts emerge.

The next resistance level for GBP/USD is located at 1.3710. GBP/USD has recently made an attempt to get to the test of this level but this attempt was stopped near 1.3700.

If GBP/USD manages to settle above the resistance at 1.3710, it will move towards the next resistance level which is located at 1.3755.

On the support side, the previous resistance at 1.3665 will likely serve as the first support level for GBP/USD. In case GBP/USD declines below this level, it will move towards the next support level at 1.3625. A move below this level will open the way to the test of the next support at 1.3575.

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

About the Author

Vladimir Zernovauthor

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.