GBP/USD Daily Forecast – Test Of Resistance At 1.3980

GBP/USD Video 19.02.21.

British Pound Gains Ground Ahead Of The Weekend

GBP/USD is moving towards the resistance at 1.4000 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below the support at the 20 EMA at 90.60 and is trying to get below the next support level at 90.50. If this attempt is successful, the U.S. Dollar Index will head towards the next support level which is located at 90.30.

Today, foreign exchange market traders will focus on the economic data from the UK. Analysts expect that Retail Sales declined by 2.5% month-over-month in January due to the negative impact of virus containment measures. On a year-over-year basis, Retail Sales are projected to decrease by 1.3%.

Traders will aslo have a chance to take a look at flash PMI data for February. UK Manufacturing PMI is projected to decline from 54.1 in January to 53.2 in February while Services PMI is expected to increase from 39.5 to 41.

Earlier, UK reported that Consumer Confidence increased from -28 in January to -23 in February. UK has one of the most successful mass vaccination programs in the world which boosts consumer mood and provides support to the British pound.

Technical Analysis

GBP/USD managed to settle above the resistance at 1.3950 and is trying to settle above the next resistance level which is located at 1.3980. If this attempt is successful, GBP/USD will head towards the resistance at 1.4000.

In case GBP/USD gets above the resistance at 1.4000, it will gain additional upside momentum and move towards the resistance at 1.4025. A move above this level will open the way to the test of the resistance at 1.4050.

On the support side, the previous resistance at 1.3950 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 1.3935. A successful test of this support level will push GBP/USD towards the support at 1.3915.

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