GBP/USD Daily Forecast – Support At 1.2750 Stays Strong

GBP/USD Video 14.09.20.

British Pound Tries To Gain More Upside Momentum

GBP/USD continues its attempts to settle above 1.2800 as the U.S. dollar is losing some ground against a broad basket of currencies.

The U.S. Dollar Index remains above the 20 EMA at 93.10 but fails to gain more upside momentum. If the U.S. Dollar Index gets below the 20 EMA, it will likely gain more downside momentum, pushing GBP/USD higher.

There are no important economic reports scheduled to be released in U.S. and UK today so GBP/USD trading dynamics will mostly depend on general market sentiment and Brexit news.

Today, riskier assets got a boost from positive economic news from China. China’s Housing Index indicated that house prices increased by 4.8% year-over-year and continued their steady growth.

There were no significant developments on the Brexit front over the weekend. Many observers remain shocked by the British plans to break the international law “in a limited way”. While the probability of hard Brexit increases day by day, the market still hopes that EU and UK will manage to reach consensus on the divorce deal. If this does not happen, GBP/USD will find itself under additional pressure.

Technical Analysis

GBP/USD managed to find support just above 1.2750 and tries to gain more upside momentum above 1.2800.

The recent downside move was very fast so there are significant gaps between levels. The nearest resistance level for GBP/USD is located at 1.2880.

If GBP/USD manages to settle above this level, it will gain more upside momentum and head towards the next major resistance level at the 50 EMA at 1.3000.

On the support side, the nearest support for GBP/USD is located near the recent lows at 1.2750. If GBP/USD moves below this level, it will head towards the next support level at 1.2650.

From a big picture point of view, GBP/USD tries to rebound from a significant support level at 1.2750. GBP/USD managed to settle above 1.2750 back in July, and a move below this level will erase all progress that was made in recent months. If this happens, GBP/USD will likely find itself under increased pressure.

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