GBP/USD Daily Forecast – Support At 1.3800 Stays Strong

GBP/USD Video 09.03.21.

British Pound Gains Ground Against U.S. Dollar

GBP/USD continues its attempts to settle above the resistance at 1.3835 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has managed to settle above the resistance at 92.25 and made an attempt to get above the next resistance at 92.50 but failed to develop sufficient upside momentum. RSI has just entered into the overbought territory but there is some room to gain additional momentum in case the right catalysts emerge. In case the U.S. Dollar Index manages to settle above the resistance at 92.50, GBP/USD will find itself under more pressure.

There are no important economic reports scheduled to be published in the U.S. and UK today so foreign exchange market traders will remain focused on U.S. Treasury yields and general market sentiment.

Treasury yields have pulled back from recent highs but this pullback did not put any material pressure on the American currency. The market remains worried about the inflationary impact of the huge $1.9 trillion stimulus package while higher yields continue to provide support to U.S. dollar.

Technical Analysis

GBP/USD is testing the nearest resistance level at 1.3835. GBP/USD has already made several attempts to settle above this level in recent trading sessions but failed to develop sufficient upside momentum.

In case GBP/USD settles above 1.3835, it will get to the test of the next resistance which is located at 1.3865. A move above the resistance at 1.3865 will push GBP/USD towards the next resistance at the 20 EMA at 1.3895.

On the support side, the nearest support level for GBP/USD is located at the 50 EMA at 1.3800. This support level has already been tested several times and proved its strength.

If GBP/USD declines below the support at the 50 EMA, it will gain additional downside momentum and head towards the next support level at 1.3780. A successful test of the support at 1.3780 will open the way to the test of the major support level at 1.3745.

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