GBP/USD Daily Forecast – Support At 1.3200 Stays Strong

British Pound Is Mostly Flat Against U.S. Dollar

GBP/USD is currently trying to settle back above the resistance at 1.3230 while the U.S. dollar is gaining ground against  a broad basket of currencies.

The U.S. Dollar Index is moving towards the resistance level at 96.50. In case the U.S. Dollar Index gets to the test of this level, GBP/USD will find itself under more pressure.

There are no important economic reports scheduled to be released in the U.S. today so foreign exchange market traders will focus on Construction PMI report from UK. Analysts expect that Construction PMI declined from 54.6 in October to 54.2 in November.

Traders will also continue to monitor the developments in U.S. government bond markets. The yield of 2-year Treasuries remains close to yearly highs, while the yield of 10-year Treasuries is trying to rebound after the recent downside move. Higher yields may provide additional support to the American currency.

Technical Analysis

GBP/USD continues its attempts to settle above the resistance level at 1.3230. In case GBP/USD manages to settle back above this level, it will head towards the next resistance at 1.3250.

A move above 1.3250 will open the way to the test of the next resistance which is located at 1.3280. If GBP/USD climbs back above 1.3280, it will head towards the next resistance level at 1.3310.

On the support side, GBP/USD needs to stay below 1.3230 to have a chance to develop downside momentum in the near term. The next support level for GBP/USD is located near the recent lows at 1.3200.

A successful test of the support at 1.3200 will open the way to the test of the next support level at 1.3170. RSI is close to the oversold territory, but there is enough room to develop additional downside momentum in case the right catalysts emerge. If GBP/USD manages to settle below the support at 1.3170, it will move towards the support level at 1.3140.

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