GBP/USD Daily Forecast – Support At 1.3625 In Sight

GBP/USD Video 26.01.21.

British Pound Is Losing Ground Against U.S. Dollar

GBP/USD declined below the support level at 1.3665 and is moving towards the next support level at 1.3625 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to settle above the 20 EMA at 90.35 and is currently testing the nearest resistance at 90.50. If this test is successful, the U.S. Dollar Index will head towards the next resistance level at 90.70 which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the employment data from the UK. Claimant Count Change report is projected to show that the number of people claiming for unemployment benefits increased by 35,000 in December. Analysts expect that Unemployment Rate increased from 4.9% in October to 5.1% in November due to the negative impact of the virus-related restrictions.

Traders will also pay attention to the latest developments in the U.S. stimulus story. Some Republicans have indicated that the new stimulus plan was too expensive, and U.S. President Joe Biden has already signaled that he was open to negotiating the eligibility requirements of $1,400 stimulus checks which are part of a broader stimulus package.

Technical Analysis

GBP/USD is currently trying to get to the test of the nearest support level which is located at 1.3625. In case GBP/USD manages to settle below this level, it will move towards the next support level at 1.3575. No material levels were formed between 1.3575 and 1.3625 so this move may be fast.

A successful test of the support at 1.3575 will open the way to the test of the next support level at 1.3540. In case GBP/USD declines below this level, it will head towards the support at the 50 EMA at 1.3515.

On the upside, the previous support level at 1.3665 will likely serve as the first resistance level for GBP/USD. If GBP/USD settles above this level, it will head towards the next resistance at 1.3710. A successful test of the resistance at 1.3710 will open the way to the test of the next resistance which is located at the recent highs at 1.3745.

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