GBP/USD Daily Forecast – Test Of Resistance At 1.3270

GBP/USD Video 11.11.20.

British Pound Gained Ground As Chances For An Orderly Brexit Increased

GBP/USD gained strong upside momentum and is testing the resistance at 1.3270 while the U.S. dollar is mostly flat against a broad basket of currencies.

The British pound rallied after UK Prime Minister Boris Johnson suffered a defeat in his attempt to pass legislation that would have breached the international law in a limited way to protect internal trade after Brexit.

This attempt draw strong criticism from EU and was viewed as a major obstacle on the way to a Brexit deal. While Johnson will likely try to pass the legislation once again, his chances are not looking good. Not surprisingly, an increasing possibility of an orderly Brexit provided significant support to the pound.

Yesterday, UK reported that Unemployment Rate increased from 4.5% in August to 4.8% in September. Meanwhile, the Claimant Count Change declined by 29,800 in October compared to analyst consensus which called for growth of 50,000.

Today, there are no important economic reports scheduled to be released in the UK and U.S. so GBP/USD traders will wait for additional Brexit news and also focus on general market sentiment.

Technical Analysis

GBP/USD is currently testing the nearest resistance level at 1.3270. It has already made several attempts to settle above this level but failed to gain sufficient upside momentum.

If GBP/USD manages to settle above 1.3270, it will move towards the next resistance level at 1.3325. A move above the resistance at 1.3325 will open the way to the test of the resistance at 1.3400.

I’d note that there are no significant levels between 1.3325 and 1.3400 so GBP/USD may quickly get to the test of the resistance at 1.3400. In addition, RSI is still in the moderate territory despite the recent upside move so there is plenty of room to gain momentum in case the right catalysts emerge.

On the support side, GBP/USD may get some support at 1.3210. A move below this level will push GBP/USD towards the stronger support level at 1.3180. If GBP/USD declines below 1.3180, it will head towards the support at 1.3140.

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