GBP/USD Daily Forecast – Test Of Resistance At 1.4200

GBP/USD Video 21.05.21.

British Pound Tries To Move Higher Ahead Of The Weekend

GBP/USD is currently trying to get above the resistance at 1.4200 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index is stuck at the support level at 89.75. If the U.S. Dollar Index declines below this level, it will move towards the support at 89.50 which will be bullish for GBP/USD.

UK has recently released Consumer Confidence report for May. The report indicated that Consumer Confidence improved from -15 in April to -9 in May compared to analyst consensus of -12. The reopening of the UK economy boosted consumer mood.

UK Retail Sales increased by 9.2% month-over-month in April compared to analyst consensus which called for growth of 4.5%. The report showed that consumer activity rebounded faster than expected, and this trend will likely stay strong as Consumer Confidence improved in May. On a year-over-year basis, Retail Sales were up by 42.4% as Retail Sales were crushed by the lockdown in April 2020.

Today, foreign exchange market traders will also have a chance to take a look at flash PMI reports for May. Analysts expect that UK Manufacturing PMI declined from 60.9 in April to 60.5 in May while Services PMI increased from 61 to 62.

Technical Analysis

GBP/USD has recently made an attempt to settle above the resistance at 1.4200 but failed to develop sufficient upside momentum. In case GBP/USD gets above this level, it will head towards the resistance at 1.4240.

A move above 1.4240 will open the way to the test of the resistance at 1.4280. If GBP/USD manages to settle above 1.4280, it will move towards the next resistance at 1.4345.

On the support side, the nearest support level for GBP/USD is located at 1.4180. If GBP/USD settles below this level, it will head towards the next support at 1.4150.

A move below 1.4150 will push GBP/USD towards the support which has recently emerged at 1.4100. A successful test of this level will open the way to the test of the support at 1.4080.

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