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

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Published: Apr 7, 2021, 06:46 UTC

GBP/USD is testing the support level at 1.3800.

British Pound Is Under Some Pressure Against U.S. Dollar

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

The U.S. Dollar Index is testing the support level at the 20 EMA at 92.35. In case this test is successful, the U.S. Dollar Index will move towards the next support level at 92.15 which will be bullish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at the final reading of UK Services PMI report for March. Analysts expect that Services PMI increased from 49.5 to 56.8 as successful mass vaccination program and a plan to gradually lift virus-related restrictions provided support to the UK economy.

Traders will also keep an eye on the latest developments in U.S. government bond markets. Yesterday, Treasury yields moved lower, which was bearish for the American currency. If this pullback continues, the U.S. dollar will find itself under more pressure which will be bullish for GBP/USD.

Technical Analysis

GBP/USD is currently testing the nearest support level at 1.3800. In case this test is successful, GBP/USD will get to the test of the next support level at 1.3780.

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

On the upside, the nearest resistance level for GBP/USD is located at the 50 EMA at 1.3820. If GBP/USD manages to settle above this level, it will head towards the next resistance which is located at the 20 EMA at 1.3835.

A successful test of the resistance at the 20 EMA at 1.3835 will open the way to the test of the next resistance at 1.3865. In case GBP/USD settles above this level, it will move towards the next resistance at 1.3900. This resistance level has been tested during recent trading sessions and proved its strength.

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

About the Author

Vladimir Zernovauthor

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.