GBP/USD Daily Forecast – Test Of Resistance At 1.4025

GBP/USD Video 22.02.21.

British Pound Starts The Week On A Strong Note

GBP/USD is currently trying to stay above above 1.4000 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index has recently made another attempt to settle below the nearest support level at 90.30 but failed to develop sufficient downside momentum. If the U.S. Dollar Index manages to settle below this level, it will head towards the next support at the 90 level which will be bullish for GBP/USD.

There are no important economic reports scheduled to be released in the U.S. and UK today so foreign exchange market traders will focus on general market sentiment. Britain’s successful mass vaccination program has recently provided significan support for the pound while U.S. stimulus hopes put pressure on the dollar.

If global market sentiment continues to improve, the American currency may find itself under additional pressure. At the same time, traders will have to closely monitor the developments on the U.S. government bond market front as rising Treasury yields may ultimately provide a boost to the U.S. dollar.

Technical Analysis

GBP/USD managed to get above the psychologically important resistance level at 1.4000 and is trying to continue its upside move. RSI is in the overbought territory so the risks of a pullback are increasing. However, the current upside trend is strong so the British pound has decent chances to gain more ground against the U.S. Dollar.

The nearest resistance level for GBP/USD is located at 1.4025. If GBP/USD manages to settle above this level, it will get to another test of the next resistance at 1.4050. A successful test of this level will push GBP/USD towards the next resistance at 1.4070.

On the support side, the previous resistance at 1.4000 will serve as the first support level for GBP/USD. If GBP/USD settles below this level, it will head towards the next support at 1.3980. A move below 1.3980 will push GBP/USD towards the next support at 1.3950.

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