GBP/USD Daily Forecast – Test Of Resistance At 1.3230

British Pound Is Mostly Flat Against U.S. Dollar

GBP/USD is currently trying to settle back above the resistance at 1.3230 while U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is stuck near the resistance level at 96.25. In case the U.S. Dollar Index gets above this level, it will move towards the next resistance at 96.50 which will be bearish for GBP/USD.

UK has just reported that Industrial Production declined by 0.6% month-over-month in October compared to analyst consensus which called for growth of 0.1%. On a year-over-year basis, Industrial Production grew by 1.4% compared to analyst consensus of 2.2%. Manufacturing Production increased by 1.3% year-over-year compared to analyst consensus of 1.7%.

Meanwhile, UK GDP report indicated that GDP increased by just 0.1% month-over-month in October compared to analyst consensus of 0.4%.

The reports highlighted the slowdown of the UK economy. However, it remains to be seen whether they will have a material impact on GBP/USD dynamics as most foreign exchange market traders would prefer to wait for the ultra-important U.S. inflation data, which will be published later today.

Technical Analysis

GBP/USD failed to settle below the support at 1.3200 and is trying to climb back above the resistance at 1.3230. In case this attempt is successful, GBP/USD will head towards the next resistance level which is located at 1.3250.

A move above 1.3250 will open the way to the test of the support at 1.3280. If GBP/USD settles above 1.3280, it will head towards the resistance at the 20 EMA at 1.3310.

On the support side, GBP/USD needs to settle below 1.3200 to continue its downside move. GBP/USD has already made several attempts to settle below this level but failed to develop sufficient downside momentum.

If GBP/USD manages to settle below 1.3200, it will head towards the support at 1.3170. A successful test of this level will push GBP/USD towards the support at 1.3140. In case GBP/USD manages to settle below 1.3140, it  will move towards the support at 1.3110.

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