GBP/USD Daily Forecast – Test Of Support At 1.3885

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

GBP/USD is currently trying to settle below the 50 EMA at 1.3885 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is currently testing the resistance level at the 20 EMA at 92.30. In case this test is successful, the U.S. Dollar Index will move towards 92.50 which will be bearish for GBP/USD.

Yesterday, U.S. dollar received support after hawkish commentary from Fed’s Clarida who stated that Fed would likely announce a reduction of its asset purchase program in 2021.

Today, foreign exchange market traders will focus on the Bank of England Interest Rate Decision. The rate is expected to stay unchanged, so traders will pay attention to Bank’s commentary.

On Thursday, traders will also have a chance to take a look at Initial Jobless Claims and Continuing Jobless Claims reports from U.S. Initial Jobless Claims report is projected to show that 384,000 Americans filed for unemployment benefits in a week. Continuing Jobless Claims are projected to decline from 3.27 million to 3.26 million.

Technical Analysis

GBP/USD is currently testing the support level at the 50 EMA at 1.3885. In case GBP/USD manages to settle below this level, it will move towards the next support level which is located near the 20 EMA at 1.3865.

A successful test of the support at the 20 EMA will open the way to the test of the next support level at 1.3835. In case GBP/USD moves below 1.3835, it will head towrds the support at 1.3800.

On the upside, GBP/USD needs to stay above the 50 EMA at 1.3885 to have a chance to develop upside momentum in the near term. The next resistance level for GBP/USD is located at 1.3900.

In case GBP/USD manages to get back above 1.3900, it will move towards the resistance at 1.3920. A successful test of this level will push GBP/USD towards the resistance at 1.3950.

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