GBP/USD Daily Forecast – Test Of Resistance At 1.4050
GBP/USD Video 10.05.21.
British Pound Gains Ground At The Start Of The Week
GBP/USD managed to get above the resistance at 1.4020 and is trying to settle above the next resistance level at 1.4050 while the U.S. dollar is flat against a broad basket of currencies.
The U.S. Dollar Index settled below the support level at 90.30 after U.S. Non Farm Payrolls report missed analyst expectations on Friday. The next material support level for the U.S. Dollar Index is located at the 90 level. If the U.S. Dollar Index gets to the test of this level, GBP/USD will get more support.
The Scottish National Party won elections on Saturday and stated that the second independence referendum was around the corner. Interestingly, the foreign exchange market is not worried about the potential referendum, and the pound gained solid upside momentum at the start of the week.
Today, traders will have a chance to take a look at UK Halifax House Price Index for April. Analysts forecast that house prices increased by 0.4% month-over-month. On a year-over-year basis, house prices are projected to grow by 7.3%.
GBP/USD gained strong upside momentum and is trying to settle above the resistance at 1.4050. RSI remains in the moderate territory, and there is plenty of room to gain additional momentum in case the right catalysts emerge.
If GBP/USD settles above 1.4050, it will head towards the next resistance level at 1.4080. A successful test of the resistance at 1.4080 will open the way to the test of the resistance at 1.4120. In case GBP/USD gets above 1.4120, it will move towards the resistance at 1.4150.
On the support side, the previous resistance level at at 1.4020 will serve as the first support level for GBP/USD. This level has been recently tested and proved its strength.
If GBP/USD declines below the support at 1.4020, it will move towards the next support at 1.4000. A successful test of the support at 1.4000 will push GBP/USD towards the support at 1.3980.
For a look at all of today’s economic events, check out our economic calendar.