GBP/USD Daily Forecast – Support At 1.2890 Stays Strong

GBP/USD Video 03.11.20.

British Pound Is Mostly Flat Against U.S. Dollar

GBP/USD did not manage to settle below the support at 1.2890 and continues to trade above 1.2900 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the resistance at 94.20 and is currently trying to move below the nearest support level at 94. If this attempt is successful, the U.S. Dollar Index may gain downside momentum and head towards the 50 EMA at 93.60 which will be bullish for GBP/USD.

Yesterday, UK reported that Manufacturing PMI decreased from 54.1 in September to 53.7 in October compared to analyst consensus of 53.3. In the U.S. Manufacturing PMI increased from 53.2 in September to 53.4 in October.

In general, Manufacturing PMI reports were better than expected and provided some support to riskier assets ahead of U.S. presidential election.

Today, trading action may be choppy as traders wait for the results of U.S. presidential election. While the British pound has been trending down in the recent trading sessions, it remains to be seen whether this weakness will continue after the U.S. election as any elected president will likely push for additional stimulus in order to support the economy, putting pressure on the U.S. dollar.

Technical Analysis

GBP/USD has recently made an attempt to settle below the support level at 1.2890 but received material support near 1.2860 and rebounded back above 1.2900.

The nearest resistance for GBP/USD is located at the 50 EMA at 1.2960. The 20 EMA is in the nearby, so this resistance level is set to be a strong obstacle on the way up for GBP/USD.

If GBP/USD settles above this level, it will head towards the next resistance at 1.3000. A move above 1.3000 will open the way to the test of the next resistance at 1.3030.

On the support side, GBP/USD needs to settle below the support at 1.2890 to continue its downside move. In this case, GBP/USD will get to the test of the next support which has emerged at 1.2860. A move below 1.2860 will push GBP/USD towards the next support level at 1.2815.

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