GBP/USD Daily Forecast – Test Of Support At 1.3635

U.S. Dollar Tries To Gain More Ground Against British Pound

GBP/USD is currently trying to settle below the support at 1.3635 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index managed to get above the resistance level at 93.40 and is trying to get to the test of the next resistance at 93.65. In case the U.S. Dollar Index manages to settle above this level, it will move towards the resistance at 93.90 which will be bearish for GBP/USD.

UK has recently released Consumer Confidence report for August which indicated that Consumer Confidence decreased from -7 in July to -8 in August compared to analyst consensus of -7.

Foreign exchange market traders also had a chance to take a look at UK Retail Sales report. The report showed that Retail Sales declined by 2.5% month-over-month in July compared to analyst consensus which called for growth of 0.4%. On a year-over-year basis, Retail Sales grew by 2.4% while analysts expected that they would grow by as much as 6%.

The Retail Sales report was much worse than expected and indicated that consumer activity was slowing down due to concerns about the spread of the Delta variant of coronavirus. This report may put additional pressure on the British pound.

Technical Analysis

GBP/USD managed to settle below the support at 1.3665 and is trying to settle below the next support level at 1.3635. In case this attempt is successful, GBP/USD will move towards the support level which is located at 1.3600.

A move below the support at 1.3600 will open the way to the test of the support at 1.3575. If GBP/USD settles below 1.3575, it will head towards the next support at 1.3540. A successful test of this level will push GBP/USD towards the support at 1.3510.

On the upside, GBP/USD needs to get back above 1.3635 to have a chance to develop upside momentum in the near term. The next resistance level for GBP/USD is located at 1.3665. In case GBP/USD settles above 1.3665, it will head towards the resistance level at 1.3690.

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