GBP/USD Daily Forecast – Test Of Resistance At 1.3450

British Pound Gains Ground Against U.S. Dollar

GBP/USD continues its attempts to settle above the resistance at 1.3450 while the U.S. dollar is losing some ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the resistance level at 95.40 but faced resistance near 95.60 and pulled back. In case the U.S. Dollar Index manages to get above 95.60, it will head towards the resistance at 95.75 which will be bearish for GBP/USD.

UK has recently reported that Claimant Count Change was -14,900 in October compared to analyst consensus of -30,000. Foreign exchange market traders also had a chance to take a look at UK Unemployment Rate report for September. The report indicated that Unemployment Rate declined from 4.5% in August to 4.3% in September compared to analyst consensus of 4.4%.

The stronger-than-expected Unemployment Rate report may provide additional support to British pound. BoE has recently surprised the market and left the interest rate unchanged, but the improving situation in the job market may push BoE to raise rates at the next meeting.

Technical Analysis

GBP/USD managed to settle above the resistance at 1.3425 and is testing the next resistance level at 1.3450. In case this test is successful, GBP/USD will move towards the next resistance level which is located at 1.3470.

A move above the resistance at 1.3470 will open the way to the test of the resistance at 1.3500. In case GBP/USD manages to settle above this level, it will continue its rebound and head towards the next resistance at the 20 EMA at 1.3535.

On the support side, GBP/USD needs to stay below 1.3450 to have a chance to develop downside momentum in the near term. The previous resistance level at 1.3425 will serve as the first support level for GBP/USD.

In case GBP/USD moves back below this level, it will head towards the support at 1.3400. A successful test of this support level will push GBP/USD towards the support at 1.3375.

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