GBP/USD Daily Forecast – Support At 1.3800 Stays Strong

British Pound Attempts To Rebound Against U.S. Dollar

GBP/USD is currently trying to settle back above 1.3800 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is moving towards the nearest support level which is located at 92.15. In case the U.S. Dollar Index manages to settle below this level, it will head towards the next support at 92 which will be bullish for GBP/USD.

There are no important economic reports scheduled to be released in the U.S. and UK today so foreign exchange market traders will focus on general market sentiment and the dynamics of U.S. government bond markets.

Interestingly, the yield of 10-year Treasuries gained downside momentum and made an attempt to settle below 1.36% before rebounding towards 1.40%. Meanwhile, the yield of 30-year Treasuries declined below the psychologically important 2.00% level.

Lower Treasury yields are bearish for U.S. dollar. However, the impact of lower yields is limited at this point, and it looks that the recent downside move could be explained by the rush to safety, which is bullish for the American currency.

Technical Analysis

GBP/USD made several attempts to settle below the support at 1.3800 but failed to develop sufficient downside momentum. Currently, it is trying to get to the test of the nearest resistance level at 1.3835.

In case GBP/USD manages to settle above 1.3835, it will head towards the next resistance which is located at 1.3865. A successful test of this resistance level will open the way to the test of the next resistance at 1.3900.

On the support side, GBP/USD needs to settle below the support at 1.3800 to have a chance to gain additional downside momentum in the near term. RSI is close to the oversold territory, but there is enough room to gain momentum in case the right catalysts emerge.

If GBP/USD settles below the support at 1.3800, it will get to the test of the next support level at 1.3780. A move below this level will open the way to the test of the support at 1.3745. In case GBP/USD gets below 1.3745, it will head towards the support at 1.3710.

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