GBP/USD Daily Forecast – U.S. Dollar Gains Ground After Yesterday’s Sell-Off

British Pound Is Moving Lower Against U.S. Dollar

GBP/USD is currently trying to settle back below the support at 1.3950 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle below the support level at the 50 EMA at 91.90 and is trying to get back above the 92 level. In case this attempt is successful, the U.S. Dollar Index will move towards the resistance at 92.15 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 Personal Income declined by 0.3% month-over-month in June after falling by 2% in May. Meanwhile, Personal Spending is projected to grow by 0.7%.

Traders will also have a chance to take a look at the final reading of Consumer Sentiment report for July which is projected to show that Consumer Sentiment declined from 85.5 in June to 80.8 in July.

Technical Analysis

GBP/USD is testing the nearest support level which is located at 1.3950. In case this test is successful, GBP/USD will move towards the next support at 1.3920.

In case GBP/USD gets below the support at 1.3920, it will head towards the next support at 1.3900. A successful test of this level will open the way to the test of the support which is located at the 50 EMA at 1.3880.

On the upside, GBP/USD needs to get back above 1.3950 to have a chance to develop upside momentum in the near term. The next resistance level for GBP/USD is located at the recent highs at 1.3980.

If GBP/USD manages to settle above the resistance at 1.3980, it will move towards the next resistance level at 1.4000.

A move above the resistance at 1.4000 will push GBP/USD towards the resistance at 1.4020. In case GBP/USD gets above this level, it will head towards the next resistance level at 1.4040.

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