GBP/USD Daily Forecast – Resistance At 1.3745 Stays Strong

GBP/USD Video 08.02.21.

British Pound Tries To Gain More Ground Against U.S. Dollar

GBP/USD is currently trying to settle above the major resistance level at 1.3745 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is currently trying to get back above 91.10. If this attempt is successful, the U.S. Dollar Index will gain additional upside momentum and head towards the next resistance level at 91.30 which will be bearish for GBP/USD.

There are no important economic reports scheduled to be released in the U.S. and UK today so foreign exchange market traders will focus on U.S. stimulus news and general market sentiment.

U.S. Treasury Secretary Janet Yellen stated that the proposed $1,400 checks should be sent to workers earning $60,000 per year. The new stimulus package continues to serve as a bearish catalyst for the bond market, and the yield of 10-year Treasuries is at the yearly highs.

It remains to be seen whether the recent rise in Treasury yields will be able to provide additional support to the American currency as the general bullish sentiment is favorable for riskier currencies like British pound.

Technical Analysis

GBP/USD managed to settle above the resistance at 1.3710 and is trying to get above the next resistance level at 1.3745. This resistance level has already been tested many times and proved its strength. Most likely, GBP/USD will need additional catalysts to settle above the resistance at 1.3745.

If GBP/USD settles above 1.3745, it will gain upside momentum and head towards the next resistance level at 1.3785. A move above this level will push GBP/USD towards the resistance at 1.3800.

On the support side, the previous resistance at 1.3710 will serve as the first support level for GBP/USD. If GBP/USD gets below this level, it will head towards the next support which is located at the 20 EMA at 1.3675. If GBP/USD declines below the 20 EMA, it will get to the test of the support at 1.3665. A move below this level will open the way to the test of the support at 1.3625.

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