GBP/USD Daily Forecast – Test Of Resistance At 1.3920

British Pound Moves Higher Against U.S. Dollar

GBP/USD is currently trying to settle above the resistance at 1.3920 while the U.S. dollar is moving lower against a broad basket of currencies.

The U.S. Dollar Index did not manage to get above the resistance at 92.15 and declined towards the 92 level. In case the U.S. Dollar Index manages to settle below this level, it will get to the test of the 50 EMA near 91.90 which will be bullish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at the final reading of UK Services PMI report for July. Analysts expect that Services PMI declined from 62.4 in June to 57.8 in July.

In the U.S., Services PMI is expected to decrease from 64.6 to 59.8. Numbers above 50 show expansion. Traders will also focus on U.S. ADP Employment Change report which is projected to show that private businesses hired 695,000 workers in July.

Technical Analysis

GBP/USD managed to settle above 1.3900 and is testing the next resistance level at 1.3920. In case GBP/USD settles above this level, it will move towards the next resistance which is located at 1.3950.

A successful test of the resistance at 1.3950 will push GBP/USD towards the resistance at 1.3980. In case GBP/USD manages to settle above the resistance at 1.3980, it will head towards the resistance at 1.4000.

On the support side, the previous resistance at 1.3900 will serve as the first support level for GBP/USD. In case GBP/USD declines below this level, it will head towards the support which is located at the 50 EMA at 1.3885.

A move below the 50 EMA will be a worrisome development for GBP/USD bulls as it will indicate that GBP/USD has lost its upside momentum. In this case, GBP/USD will move towards the next support level which is located near the 20 EMA at 1.3865. A successful test of the 20 EMA will open the way to the test of the support at 1.3835.

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