GBP/USD Daily Forecast – Trading Remains Choppy

GBP/USD Video 08.06.21.

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

GBP/USD continues its attempts to settle below the support at 1.4150 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index failed to settle below the support at 90 and is trying to gain upside momentum. The nearest resistance level for the U.S. Dollar Index is located at the 20 EMA at 90.20. In case the U.S. Dollar Index gets 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 U.S. trade balance data and JOLTs Job Openings for April, although these reports will likely have minimal impact on currency dynamics.

The market will continue to wait for the key U.S. inflation data which will be released on Thursday. These inflation reports will have a major impact on currency dynamics. If U.S. Inflation Rate gets above the 5% level, traders will likely rush to sell riskier assets which will be bullish for the U.S. dollar. Trading action may remain choppy ahead of inflation data, so traders should be prepared for fast moves.

Technical Analysis

GBP/USD is currently trying to get below the support at 1.4150. In case this attempt is successful, GBP/USD will move towards the next support level which is located at the 20 EMA at 1.4140.

A successful test of the support at the 20 EMA will open the way to the test of the next support level at 1.4100. In case GBP/USD settles below 1.4100, it will move towards the next support at 1.4080.

On the upside, the nearest resistance level for GBP/USD is located at 1.4180. If GBP/USD gets above this level, it will head towards the next resistance at 1.4200. A move above the resistance at 1.4200 will push GBP/USD towards the resistance level which is located near the recent highs at 1.4240.

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