GBP/USD Daily Forecast – Test Of Support At 1.3500

British Pound Is Moving Lower Against U.S. Dollar

GBP/USD is currently trying to settle back below 1.3500 while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle below the 50 EMA at 95.55 and moved back above the resistance at 95.75. The next resistance level for the U.S. Dollar Index is located at the 96 level. In case the U.S. Dollar Index manages to get to the test of this level, GBP/USD will find itself under more pressure.

Today, foreign exchange market traders will have a chance to take a look at the final reading of U.S. Manufacturing PMI report for December. Analysts expect that Manufacturing PMI declined from 58.3 in November to 57.8 in December.

Traders will also keep an eye on the developments in U.S. government bond markets. The yield of 2-year Treasuries remains close to highs near 0.76%, and a move above this level may provide more support to the American currency.

Technical Analysis

GBP/USD declined below the support at 1.3515 and is testing the next support level at 1.3500. In case this test is successful, GBP/USD will move towards the support level at 1.3460.

A move below the support at 1.3460 will push GBP/USD towards the next support at 1.3440. If GBP/USD declines below this level, it will head towards the support at 1.3420. A successful test of the support at 1.3420 will lead to the test of the 50 EMA which is located at 1.3410.

On the upside, the previous support at 1.3515 will serve as the first resistance level for GBP/USD. If GBP/USD gets back above this level, it will move towards the resistance at 1.3535.

A successful test of the resistance at 1.3535 will push GBP/USD towards the resistance at 1.3550. In case GBP/USD manages to settle above this level, it will head towards the resistance at 1.3575.

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