GBP/USD Daily Forecast – Resistance At 1.3900 Remains A Major Obstacle On The Way Up

GBP/USD Video 06.05.21.

British Pound Is Mostly Flat Against U.S. Dollar

GBP/USD continues to test the resistance at 1.3900 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index remains near the resistance at the 20 EMA at 91.30. In case the U.S. Dollar Index manages to settle above this level, it will head towards the next resistance at the 50 EMA at 91.45 which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the Bank of England Interest Rate Decision. The rate is projected to stay unchanged at 0.1% so traders will pay attention to the Bank’s commentary.

Traders will also have a chance to take a look at the final reading of UK Services PMI report for April. Analysts expect that Services PMI increased from 56.3 in March to 60.1 in April.

In the U.S., traders will focus on Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims report is projected to show that 540,000 Americans filed for unemployment benefits in a week. Continuing Jobless Claims are projected to decline from 3.66 million to 3.62 million.

Technical Analysis

GBP/USD continues its attempts to settle above the resistance at 1.3900. If GBP/USD manages to settle above this level, it will get to another test of the resistance at 1.3920.

A successful test of the resistance at 1.3920 will push GBP/USD towards the next resistance at 1.3950. If GBP/USD settles above this level, it will head towards the resistance at 1.3980. A move above this level will open the way to the test of the resistance at 1.4000.

On the support side, the nearest support level for GBP/USD is located at the 20 EMA at 1.3875. If GBP/USD manages to settle below the support at the 20 EMA, it will move towards the 50 EMA at 1.3850. A successful test of this level will push GBP/USD towards the support at 1.3800. No significant levels were formed between 1.3800 and the 50 EMA so this move may be fast.

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