GBP/USD Daily Forecast – Test Of Resistance At 1.3400

GBP/USD Video 26.11.20.

British Pound Continues To Move Higher Against U.S. Dollar

GBP/USD is trying to settle above the resistance at 1.3400 while the U.S. dollar continues to lose ground against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below the key support level at 92.10 and is moving towards yearly lows at 91.75. Today, many foreign exchange market traders are absent from their desks due to Thanksgiving holiday, but the U.S. dollar remains under material pressure.

If the U.S. Dollar Index declines below the support at 91.75, it will likely gain significant downside momentum which will be bullish for GBP/USD.

While GBP/USD traders will continue to monitor general dynamics of the American currency, they will also wait for any Brexit news. At this point, the market believes that UK and EU will soon manage to sign a compromise deal, avoiding hard Brexit.

British pound gained a lot of ground in recent trading sessions on hopes for a successful deal. However, it remains to be seen whether the pound will be able to go higher on deal news or traders would prefer to sell the news in order to take profits.

Technical Analysis

GBP/USD is currently testing the nearest resistance level at 1.3400. While GBP/USD gained a lot of ground in recent trading sessions, RSI is still in the moderate territory so there is more room to gain upside momentum in case the right catalysts emerge.

If GBP/USD manages to settle above the resistance at 1.3400, it will continue its upside move and head towards the next resistance level at September highs at 1.3485.

In case GBP/USD moves above 1.3485, it will head towards the next resistance which is located at the highs that were reached back in December 2019 at 1.3515.

On the support side, the nearest material support level for GBP/USD is located at 1.3325. No important levels were formed between 1.3325 and 1.3400 so GBP/USD may quickly get to the test of this support level in case of a sell-off. A move below the support at 1.3325 will push GBP/USD towards the next support level at 1.3270.

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