GBP/USD Daily Forecast – U.S. Dollar Attempts To Gain More Ground Against British Pound

British Pound Is Mostly Flat Against U.S. Dollar

GBP/USD is stuck in the range between the support at 1.3425 and the resistance at 1.3450 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index managed to get above the 96 level and is moving towards the next resistance level at the yearly highs at 96.25. In case the U.S. Dollar Index manages to settle above this level, it will gain additional upside momentum and head towards the resistance at 96.50 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 Existing Home Sales declined by 1% month-over-month in October after growing by 7% in September.

It remains to be seen whether this report will have a major impact on currency dynamics as traders may stay focused on the developments in Europe, which struggles against a powerful wave of coronavirus.

Technical Analysis

GBP/USD has recently made an attempt to get below the support level at 1.3425 but failed to develop sufficient downside momentum. In case GBP/USD manages to settle below this level, it will head towards the next support which is located at 1.3400. RSI is in the moderate territory, and there is plenty of room to gain additional momentum in case the right catalysts emerge.

If GBP/USD settles below the support level at 1.3400, it will move towards the next support at 1.3375. A successful test of the support at 1.3375 will open the way to the test of the next support at 1.3350.

On the upside, GBP/USD needs to settle above the resistance at 1.3450 to have a chance to develop upside momentum in the near term. If GBP/USD gets above this level, it will head towards the resistance at 1.3470. The next resistance level for GBP/USD is located near the 20 EMA at 1.3500. In case GBP/USD climbs above the 20 EMA, it will gain additional upside momentum and head towards the next resistance level at 1.3525.

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