GBP/USD Daily Forecast – Test Of Support At 1.3800

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

GBP/USD is currently trying to settle below the support at 1.3800 while U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index remains stuck near the 93 level. In case the U.S. Dollar Index settles above 93, it will move towards the resistance at 93.10 which will be bearish for GBP/USD.

There are no important economic reports scheduled to be released in the UK today so foreign exchange market traders will focus on the economic data from U.S.

Analysts expect that preliminary Michigan Consumer Sentiment report for August will indicate that Consumer Sentiment remained unchanged at 81.2. Consumer Sentiment reached a high of 88.3 in April, when it was boosted by the stimulus package, and moved lower in recent months. If Consumer Sentiment is stronger than expected, U.S. dollar may get more support.

Traders will also continue to monitor the developments in U.S. government bond markets. The yield of 10-year Treasuries failed to settle above the 50 EMA at 1.3610% but remains close to this level. In case the yield of 10-year Treasuries gets above the 50 EMA, it will gain additional upside momentum which will be bullish for the American currency.

Technical Analysis

GBP/USD managed to settle below the support at 1.3835 and is testing the next support level at 1.3800. In case GBP/USD manages to settle below this level, it will get to the test of the next support level which is located at 1.3780.

A successful test of the support at 1.3780 will open the way to the test of the support at 1.3745. In case GBP/USD declines below this level, it will move towards the next support at 1.3710.

On the upside, the previous support at 1.3835 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 the 20 EMA at 1.3850. A move above the 20 EMA will push GBP/USD towards the 50 EMA at 1.3875.

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