GBP/USD Daily Forecast – Test Of Resistance At 1.3440

British Pound Is Mostly Flat Against U.S. Dollar

GBP/USD is currently trying to settle above the resistance at 1.3440 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index is trying to get to the test of the nearest support level which is located at 96. A move below this level will open the way to the test of the next support at 95.75 which will be bullish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at Case-Shiller Home Price Index from U.S. Analysts expect that home prices increased by 1.1% month-over-month in October. On a year-over-year basis, home prices are projected to grow by 18.5%.

Traders will also keep an eye on the developments in U.S. government bond markets. The yield of 2-year Treasuries has recently managed to get to yearly highs at 0.75%, while the yield of longer-term bonds remained under some pressure. Higher yields may provide more support to the American currency, although it remains to be seen whether the move in shorter-term bonds will be sufficient enough to have an impact on U.S. dollar dynamics.

Technical Analysis

GBP/USD managed to settle above the resistance level at 1.3420 and is trying to settle above the next resistance which is located at 1.3440. In case this attempt is successful, GBP/USD will move towards the next resistance level at 1.3460.

A move above the resistance at 1.3460 will push GBP/USD towards the resistance at 1.3500. In case GBP/USD settles above this level, it will head towards the resistance level at 1.3515.

On the support side, the previous resistance at 1.3420 will serve as the first support level for GBP/USD. If GBP/USD manages to settle back below this level, it will head towards the next support which is located at 1.3400. A successful test of the support at 1.3400 will lead to the test of the next support level at the 50 EMA at 1.3390.

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