GBP/USD Daily Forecast – Support At 1.3625 Stays Strong

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Published: Jan 14, 2021, 06:59 UTC

GBP/USD tried to settle below the nearest support level at 1.3625 but did not develop sufficient downside momentum.

British Pound Is Flat Against U.S. Dollar

GBP/USD received support near 1.3625 and is trying to move higher while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index settled above the 20 EMA at 90.20 and made an attempt to get above the next resistance level at 90.50 but failed to develop sufficient upside momentum. If the U.S. Dollar Index manages to settle above 90.50, it will gain additional momentum and head towards the resistance at 90.70 which will be bearish for GBP/USD.

Yesterday, the U.S. House of Representatives impeached the U.S. President Donald Trump for the second time. The trial will not proceed until the Senate is back in regular session next Tuesday, and the foreign exchange market has completely ignored the historic development.

Today, traders will have a chance to take a look at the latest U.S. job market data. Analysts expect that Initial Jobless Claims increased from 787,000 to 795,000 while Continuing Jobless Claims declined from 5.07 million to 5.06 million. The reports will show whether the second wave of the virus puts additional pressure on the job market.

Technical Analysis

GBP/USD made several attempts to settle below the nearest support level at 1.3625 but these attempts yielded no results. In case GBP/USD declines below this level, it will gain downside momentum and head towards the next support level at 1.3575. There are no important levels 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 which is located at the 20 EMA at 1.3560. If GBP/USD settles below this level, it will head towards the next support at 1.3540.

On the upside, GBP/USD needs to stay above the support level at 1.3625 to have a chance to develop upside momentum in the near term. The next resistance level for GBP/USD is located at 1.3665. If GBP/USD manages to settle above this level, it will head towards the resistance which is located near the recent highs at 1.3710.

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

About the Author

Vladimir Zernovauthor

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.