GBP/USD Daily Forecast – Support At 1.3010 In Sight

GBP/USD Video 10.08.20.

Republicans And Democrats Fail To Negotiate A New Coronavirus Aid Package

GBP/USD trades near 1.3050 while the U.S. dollar is flat against a broad basket of currencies as the U.S. lawmakers failed to negotiate a new U.S. coronavirus aid package over the weekend.

U.S. Republicans and Democrats failed to reach consensus on the new coronavirus aid bill, and the U.S. President Donald Trump had to use executive orders to extend some benefits.

The new orders will provide unemployment benefits of $400 per week, down from the previous $600 per week. This measure should support unemployed workers while giving them an incentive to get back to work.

In addition, Trump’s executive orders suspend the collection of payroll taxes and stop evictions from rental housing that depends on federal financial backing.

The U.S. economy clearly needs more stimulus so talks between Republicans and Democrats will continue. However, the gap between their negotiating positions is very wide so it is not clear when the consensus will be reached.

Meanwhile, U.S. – China tensions continue to increase on a daily basis. The U.S. has decided to audit all foreign firms listed at American exchanges from 2022, a move aimed at Chinese companies whose stocks trade on U.S. exchanges.

The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has failed to settle above 93.5. In case U.S. Dollar Index manages to get below the 93 level, GBP/USD will have good chances to test the recent highs near 1.3200.

Technical Analysis

GBP/USD has failed to settle above the nearest resistance level at 1.3110 and continues to trade near 1.3050.

The nearest support level for GBP/USD has emerged at 1.3010. In case GBP/USD settles below this level, it will head towards the next support level at 1.2980.

On the upside, a move above the resistance at 1.3110 will likely lead to increased upside momentum which could push GBP/USD closer to the recent highs at 1.3200.

RSI has left the overbought territory so GBP/USD has plenty of room to gain momentum in case the right catalysts emerge.

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