GBP/USD Daily Forecast – Test Of Resistance At 1.3950

GBP/USD Video 03.03.21.

British Pound Is Mostly Flat Against U.S. Dollar

GBP/USD is currently testing the resistance level at 1.3950 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index received support near the 50 EMA at 90.70 and is moving towards the resistance at 90.90. If the U.S. Dollar Index manages to settle above this level, it will head towards the next resistance at 91.10 which will be bearish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at the final readings of Services PMI reports from the U.S. and UK. Analysts expect that U.S. Services PMI increased from 58.3 in January to 58.9 in February. In the UK, Services PMI is expected to grow from 39.5 to 49.7.

The market will also pay attention to U.S. ADP Employment Change report which is expected to show that private businesses hired 177,000 workers in February after adding 174,000 jobs in January.

Technical Analysis

GBP/USD managed to settle above the resistance at the 20 EMA at 1.3930 and is trying to settle above the next resistance level at 1.3950. If this attempt is successful, GBP/USD will move towards the next resistance level which is located at 1.3980.

In case GBP/USD settles above the resistance at 1.3980, it will head towards the resistance at 1.4000. A move above this level will push GBP/USD towards the resistance at 1.4030.

On the support side, the previous resistance at the 20 EMA at 1.3930 will 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 move below this support level will open the way to the test of the next support at 1.3865.

From a big picture point of view, GBP/USD is trying to stabilize after the recent sell-off. If GBP/USD manages to settle in the range between 1.3900 and 1.4000, it will have a good chance to gain additional upside momentum and continue its upside trend.

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