GBP/USD Daily Forecast – Test Of Resistance At 1.3950

British Pound Tries To Gain More Ground Against U.S. Dollar

GBP/USD is currently trying to get back above the resistance at 1.3950 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at 91.80. In case this test is successful, the U.S. Dollar Index will head towards the next resistance at 92 which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on flash PMI data from UK. Analysts expect that Manufacturing PMI declined from 65.6 in May to 64 in June. Services PMI is projected to increase from 62.9 to 63.

In the U.S., Manufacturing PMI is projected to decline from 62.1 to 61.5 while Services PMI is expected to decrease from 70.4 to 70.

Traders will also have a chance to take a look at U.S. New Home Sales data for May. Analysts project that New Home Sales decreased by 2.1% month-over-month after declining by 5.9% in April.

Technical Analysis

GBP/USD managed to settle above the resistance at 1.3920 and is testing the next resistance level which is located at 1.3950. In case GBP/USD manages to settle above this level, it will head towards the next resistance at 1.3980.

A successful test of the resistance at 1.3980 will open the way to the test of the resistance at 1.4000. If GBP/USD gets above this level, it will head towards the next resistance which is located at the 20 EMA at 1.4020. The 50 EMA is located in the nearby so GBP/USD will likely face strong resistance near 1.4020.

On the support side, GBP/USD needs to stay below 1.3950 to have a chance to develop downside momentum in the near term. The previous resistance at 1.3920 will serve as the first support level for GBP/USD.

If GBP/USD declines below this level, it will move towards the next support at 1.3900. In case GBP/USD manages to settle below the support at 1.3900, it will head towards the next support level at 1.3865.

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