GBP/USD Daily Forecast – Test Of Resistance At 1.4070

GBP/USD Video 23.02.21.

British Pound Remains Strong Against U.S. Dollar

GBP/USD is currently trying to settle above the resistance at 1.4070 while the U.S. dollar is mostly flat against a broad basket of currencies.

Yesterday, the U.S. Dollar Index managed to get below the support at 90.30 and declined towards the 90 level. Currently, the U.S. Dollar Index is trying to settle below the support at 90. If this attempt is successful, the U.S. Dollar Index will head towards the next support level at 89.75 which will be bullish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at the employment data from the UK. Analysts expect that Unemployment Rate increased from 5% in November to 5.1% in December due to the negative impact of virus containment measures. Meanwhile, Claimant Count Change report is projected to show that the number of people claiming for unemployment benefits increased by 25,000 in January.

Technical Analysis

GBP/USD managed to get above 1.4050 and is trying to settle above the resistance level at 1.4070. RSI is in the overbought territory, and the risks of a pullback are increasing day by day. If GBP/USD manages to settle above 1.4070, it will get to another test of the resistance which has emerged at 1.4085.

A move above the resistance at 1.4085 will push GBP/USD towards the next resistance level at 1.4100. In case GBP/USD settles above 1.4100, it will head towards the next resistance at 1.4150. It should be noted that GBP/USD has not visited this territory for several years so it remains to be seen whether previous levels will be relevant for today’s trading.

On the support side, the nearest support level for GBP/USD is located at 1.4025. No important levels have emerged between 1.4025 and 1.4070 so GBP/USD may quickly get to the test of the support at 1.4025 in case of a pullback. If GBP/USD declines below 1.4025, it will head towards the next support at 1.4000. A successful test of the support at 1.4000 will open the way to the test of the next support level at 1.3980.

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