GBP/USD Daily Forecast – Support At 1.3325 Stays Strong

GBP/USD Video 24.11.20.

British Pound Tries To Continue Its Upside Move

GBP/USD managed to stay above the nearest support at 1.3325 and is trying to gain upside momentum while the U.S. dollar is losing ground against a broad basket of currencies.

Yesterday, the U.S. Dollar Index made an attempt to settle above the resistance at 92.80 after the release of better-than-expected PMI reports. U.S. Manufacturing PMI increased from 53.4 to 56.7 while Services PMI grew from 56.9 to 57.7. Most likely, the surprising reports pushed traders to reduce their short dollar positions on the foreign exchange market.

Today, the U.S. dollar failed to continue the upside move, and the U.S. Dollar Index is currently trying to settle below 92.50. If this attempt is successful, the U.S. Dollar Index will move towards the support at 92.10 which will be bullish for GBP/USD.

UK has also provided PMI reports on Monday which were better than analyst expectations. Manufacturing PMI increased from 53.7 to 55.2 while analysts expected that it would decline to 50.5. Meanwhile, Services PMI fell from 51.4 to 45.8 compared to analyst consensus of 42.5. Numbers below 50 show contraction.

Technical Analysis

GBP/USD faced strong resistance at 1.3400 and pulled back closer to the nearest support level at 1.3325. Currently, it is trying to gain additional upside momentum in order to get to another test of the resistance at 1.3400.

There are no important levels between the support at 1.3325 and the resistance at 1.3400 so GBP/USD may move fast between these levels. RSI is still in the moderate territory despite the strength of the recent upside move so there is plenty of room to gain momentum in case the right catalysts emerge.

In case GBP/USD manages to settle above 1.3400, it will head towards the next ressitance level at 1.3485.

On the support side, GBP/USD must settle below the nearest support at 1.3325 to have a chance to gain upside momentum. A move below this level will open the way to the test of the next support at 1.3270.

If GBP/USD declines below 1.3270, it will move towards the next support level at the 20 EMA at 1.3210.

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