GBP/USD Daily Forecast – Test Of Resistance At 1.3180

GBP/USD Video 09.11.20.

British Pound Starts The Week On A Strong Note

GBP/USD is trying to settle above the resistance at 1.3180 as the U.S. dollar continues to lose ground against a broad basket of currencies.

The U.S. Dollar Index gained strong downside momentum and is currently trying to get to the test of the nearest support level at 92.10. Despite the strength of the recent downside move, RSI remains in the moderate territory so there is plenty of room to gain more momentum. In case the U.S. Dollar Index declines below the support at 92.10, it will head towards the yearly lows at 91.75.

On Friday, the U.S. Non Farm Payrolls report for October indicated that Non Farm Payrolls increased by 638,000 compared to analyst consensus of 600,000. Unemployment Rate decreased from 7.9% in September to 6.9% in October.

Today, there are no important economic reports scheduled to be released in the U.S. and UK so traders will focus on markets’ reaction to Biden’s victory in the U.S. presidential election and Brexit negotiations between UK and EU.

The topic of Brexit has left the headlines in recent weeks as traders were preoccupied with the U.S. presidential election but it is set to return to the news flow as EU and UK enter the final week of negotiations.

Technical Analysis

GBP/USD gained strong upside momentum and is trying to settle above the resistance at October highs at 1.3180. If this attempt is successful, GBP/USD will head towards the next resistance level at 1.3270. This move may be fast since there are no material levels between 1.3180 and 1.3270.

In case GBP/USD manages to settle above the resistance at 1.3270, it will continue its upside move and head towards the next resistance level at 1.3325.

On the support side, the previous resistance at 1.3140 will likely serve as the first support level for GBP/USD. If GBP/USD declines below this level, it will gain downside momentum and head towards the next support at 1.3070. A move below 1.3070 will open the way to the test of the support at the 20 EMA at 1.3045.

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