GBP/USD Daily Forecast – Resistance At 1.4000 Remains A Major Obstacle On The Way Up

GBP/USD Video 21.04.21.

British Pound Pulls Back Against U.S. Dollar

GBP/USD is currently trying to settle below the support at 1.3950 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index has settled back above the 91 level and is trying to get to the test of the nearest resistance at 91.30. In case the U.S. Dollar Index moves above this level, it will head towards the resistance at 91.50 which will be bearish for GBP/USD.

UK has just provided inflation reports for March. Inflation Rate increased by 0.3% month-over-month, fully in line with the analyst consensus. On a year-over-year basis, Inflation Rate increased by 0.7% compared to analyst consensus of 0.8%. Core Inflation Rate grew by 1.1% year-over-year. Inflation reports indicated that inflation remained fully under control.

Today, foreign exchange market traders will also focus on the developments in U.S. government bond markets. The yield of 10-year Treasuries has declined to 1.56% after an unsuccessful attempt to settle above the 20 EMA at 1.61%. In case Treasury yields continue to move lower, the U.S. dollar may find itself under more pressure.

Technical Analysis

GBP/USD managed to get below the support at 1.3950 and is trying to get to another test of the next support level at 1.3920. In case GBP/USD manages to settle below the support at 1.3920, it will head towards the support level at 1.3900.

A successful test of this level will push GBP/USD towards the next support at 1.3865. If GBP/USD declines below this level, it will move towards the support which is located at the 20 EMA at 1.3835.

On the upside, the previous support at 1.3950 will serve as the first resistance level for GBP/USD. If GBP/USD manages to settle above this level, it will move towards the next resistance at 1.3980.

A successful test of the resistance at 1.3980 will push GBP/USD towards the major resistance level at 1.4000. In case GBP/USD settles above this level, it will get to the test of the next resistance at 1.4020.

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