GBP/USD Daily Forecast – Resistance At The 50 EMA Stays Strong

GBP/USD Video 05.10.20.

U.S. Dollar Is Flat Against The British Pound At The Beginning Of The Week

GBP/USD is flat at the start of the week as traders await additional news on the health of U.S. President Donald Trump who tested positive for COVID-19 several days ago.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, is currently stuck in a range between support at the 20 EMA at 93.65 and resistance at the 50 EMA at 93.90.

A move out of this range will likely lead to increased momentum, but the American currency will likely need additional catalysts for a notable move.

Today, traders will focus on the Services PMI data for UK and U.S. UK Services PMI is expected to decline from 58.8 in August to 55.1 in September. Numbers above 50 show expansion. U.S. Services PMI is projected to decrease from 55 to 54.6.

Analysts expect that the recovery of the services segment slowed down due to the continued problems on the coronavirus front. If the current pace of the services segment recovery is weaker than expected, safe haven assets like the U.S. dollar may get a boost while riskier currencies like the British pound may find themselves under pressure.

Technical Analysis

GBP/USD continues its attempts to settle above the nearest resistance level at the 50 EMA at 1.2930. In case GBP/USD manages to get above this level, it will gain upside momentum and move towards the next resistance at 1.3000.

A move above the resistance at 1.3000 will open the way to the test of the next significant resistance level at 1.3110.

On the support side, the nearest support level is located at the 20 EMA at 1.2900. If GBP/USD settles below the support at the 20 EMA, it will gain downside momentum and move towards the next support level at 1.2815.

If GBP/USD gets below the support at 1.2815, it will decline towards the support at 1.2780. A move below 1.2780 will open the way to the test of the major support level at 1.2750.

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