GBP/USD Daily Forecast – Test Of Resistance At 1.3210

GBP/USD Video 16.11.20.

British Pound Is Trying To Continue Its Upside Move At The Start Of The Week

GBP/USD has managed to get back above 1.3200 and is trying to develop additional upside momentum as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is currently testing the nearest support level which has emerged at 92.60. If the U.S. Dollar Index manages to settle below this level, it will gain downside momentum and move below 92.50 which will be bullish for GBP/USD.

There are no important economic reports scheduled to be released in the UK today, so traders will mostly focus on the general sentiment of the foreign exchange market.

Today, this sentiment is lifted by positive economic data from China and Japan. In China, Retail Sales increased by 4.3% year-over-year in October while Industrial Production grew by 6.9%.

In Japan, third-quarter GDP grew by 5% quarter-over-quarter compared to analyst consensus which called for growth of 4.4%.

Encouraging news from Asian countries, which have managed to contain the spread of the virus compared to Europe and U.S., boosted riskier assets like the British pound and put some pressure on the American currency.

Technical Analysis

GBP/USD is currently trying to settle above the nearest resistance level at 1.3210. If GBP/USD manages to gain additional upside momentum, it will head towards the next resistance level at 1.3270.

A move above the resistance at 1.3270 will open the way to the test of the next resistance level near the recent highs at 1.3325. In case GBP/USD settles above 1.3325, it will move towards the next resistance at 1.3400. I’d note that there are big gaps between levels in this area so GBP/USD may move fast in case the right catalysts emerge.

On the support side, the nearest support level is located at 1.3180. If GBP/USD declines below this level, it will head towards the next support at 1.3140. A move below the support at 1.3140 will push GBP/USD towards the next support at the 20 EMA at 1.3115.

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