GBP/USD Daily Forecast – Test Of Resistance At 1.3925

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Published: Mar 11, 2021, 06:33 UTC

GBP/USD settled above the 20 EMA and is trying to settle above the next resistance at 1.3925.

British Pound Moves Higher Against U.S. Dollar

GBP/USD continues to rebound and is trying to settle above the resistance at 1.3925 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below the support at the 92 level and made an attempt to settle below the next support at 91.75. In case the U.S. Dollar Index declines below the support at 91.75, it will head towards the support at 91.50 which will be bullish for GBP/USD.

Yesterday, the U.S. reported that Core Inflation Rate grew by 1.3% month-over-month in February compared to analyst consensus which called for growth of 1.4%.

The weaker-than-expected inflation report put pressure on the American currency as the recent upside move of the U.S. dollar was triggered by expectations of higher inflation and higher Treasury yields.

Interestingly, the inflation report did not put any material pressure on Treasury yields which are located not far from recent highs. If Treasury yields gain more upside momentum and get to new highs, the U.S. dollar may get additional support.

Technical Analysis

GBP/USD is currently testing the nearest resistance level at 1.3925. RSI is in the moderate territory, and there is plenty of room to gain momentum in case the right catalysts emerge.

If GBP/USD manages to settle above 1.3925, it will head towards the next resistance level which is located at 1.3950.

A move above the resistance at 1.3950 will open the way to the test of the resistance at 1.3980. In case GBP/USD moves above the resistance at 1.3980, it will get to the test of the major resistance level at 1.4000.

On the support side, a move below 1.3925 will push GBP/USD towards the next support level which is located at the 20 EMA at 1.3905. In case GBP/USD declines below the 20 EMA, it will head towards the support at 1.3865.

From a big picture point of view, GBP/USD returned back to the 1.3900 – 1.4000 range which is a welcome development for the bulls.

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

About the Author

Vladimir Zernovauthor

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.