GBP/USD Daily Forecast – Support At 1.2925 Stays Strong

GBP/USD Video 21.09.20.

British Pound Tries To Gain Upside Momentum

GBP/USD managed to stay above the support at 1.2925 and tries to get to the test of the 50 EMA level at 1.2990 as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below the 20 EMA at 93.05 and is testing the nearest support level at 92.80. This support level has already been tested many times in recent trading sessions, and the U.S. Dollar Index failed to gain more downside momentum.

In case the U.S. Dollar Index moves below 92.80, it will head towards the next support at 92.50 which will be bullish for GBP/USD.

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

In addition, traders may focus on the possibility of a new lockdown in London. According to reports, UK health officials believe that the country is at a critical point in the pandemic so new measures may be required to contain the spread of the virus.

Technical Analysis

GBP/USD has settled above the support at 1.2925 and is trying to gain some upside momentum. The nearest resistance level for GBP/USD is located at the 50 EMA at 1.2990.

The 20 EMA is located at 1.3000 so GBP/USD is set to face strong resistance at 1.2990 – 1.3000.

A move above the 50 EMA and the 20 EMA will signal that GBP/USD is ready to return to its previous upside trend. In this case, GBP/USD will gain more upside momentum and head towards the next significant resistance level at 1.3110.

On the support side, the nearest support level for GBP/USD  is located at 1.2925. If GBP/USD settles below this level, it will gain downside momentum and head towards the next support level at 1.2880.

A move below 1.2880 will present a problem for the bulls as it will signal that GBP/USD failed to continue its rebound and is ready to move lower. If this happens, GBP/USD will head towards the next support level at 1.2815.

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