GBP/USD Daily Forecast – Test Of Resistance At 1.3935

GBP/USD Video 16.02.21.

British Pound Remains Strong Against U.S. Dollar

GBP/USD is currently trying to settle above the resistance at 1.3935 while the U.S. dollar remains under pressure against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle below the nearest support at 90.30. This support level has already been tested many times and proved its strength. If the U.S. Dollar Index manages to settle below this level, it will gain downside momentum and head towards the support at 90 which will be bullish for GBP/USD.

Yesterday, UK Prime Minister Boris Johnson stated that he wanted to create a cautious but irreversible path out of the current coronavirus lockdown. Britain’s success in mass vaccination provided material support to the British pound, and gradual elimination of virus containment measures may provide additional support.

Today, foreign exchange market traders will focus on NY Empire State Manufacturing Index for February as it is the only notable economic report scheduled to be published in the U.S. and UK. Analysts expect that NY Empire State Manufacturing Index will increase from 3.5 in January to 6 in February.

Technical Analysis

GBP/USD managed to get above the resistance at 1.3915 and is trying to settle above the next resistance level at 1.3935. If this attempt is successful, GBP/USD will move 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 settles above this level, it will get to the test of the psychologically important resistance level at 1.4000. It should be noted that GBP/USD has not visited this territory for several years so it remains to be seen whether previous levels will be relevant for today’s trading.

On the support side, the previous resistance at 1.3915 will likely serve as the first support level for GBP/USD. If GBP/USD declines below this level, it will head towards the next support at 1.3900. A successful test of this level will push GBP/USD towards the support at 1.3875.

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