GBP/USD Daily Forecast – Test Of Resistance At 1.3835

GBP/USD Video 11.02.21.

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

GBP/USD is trying to settle above the resistance at 1.3835 while the U.S. dollar remains under pressure against a broad basket of currencies.

The U.S. Dollar Index is currently trying to get to another test of the nearest support level at 90.30. If the U.S. Dollar Index declines below this level, it will move towards the next support at the 90 level which will be bullish for GBP/USD.

Yesterday, U.S. reported that Inflation Rate grew by 1.4% year-over-year in January compared to analyst consensus of 1.5%. Core Inflation Rate also increased by 1.4%. Continued weakness in certain areas like air travel put pressure on prices.

Today, foreign exchange market traders will focus on employment reports from the U.S. Initial Jobless Claims are expected to decline from 779,000 to 757,000 while Continuing Jobless Claims are projected to decrease from 4.59 million to 4.49 million. While the job market has started to recover from the blow dealt by the second wave of the virus, the situation remains challenging as the services segment remains under pressure.

Technical Analysis

GBP/USD gained strong upside momentum and is currently testing the nearest resistance level at 1.3835. If this test is successful, GBP/USD will move towards the next resistance level at 1.3875.

Yesterday, GBP/USD made an attempt to get to the test of this level but faced material resistance and pulled back closer to 1.3835, but it should have better chances to settle above 1.3875 on the second attempt.

In case GBP/USD gets above the resistance at 1.3875, it will head towards the next resistance level at 1.3900. A successful test of the resistance at 1.3900 will push GBP/USD towards the resistance at 1.3925.

On the support side, a move below 1.3835 will open the way to the test of the support at 1.3800. If GBP/USD declines below this support level, it will head towards the support at 1.3785. In case GBP/USD gets below this level, it will move towards the major support level at 1.3745.

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