GBP/USD Daily Forecast – U.S. Dollar Gains Ground Against British Pound

GBP/USD Video 01.04.21.

British Pound Pulls Back Against U.S. Dollar

GBP/USD faced resistance at 1.3780 and pulls back while the U.S. dollar is gaining ground against a broad basket of currencies.

Yesterday, the U.S. Dollar Index made an attempt to settle below the support at the 93 level but failed to develop sufficient downside momentum. Currently, the U.S. Dollar Index managed to get back above the resistance at 93.20 and is moving towards the next resistance level at 93.40. In case the U.S. Dollar Index settles above this level, it will gain additional upside momentum which will be bearish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at the final reading of UK Manufacturing PMI report for March. Analysts expect that Manufacturing PMI increased from 55.1 to 57.9. In the U.S., Manufacturing PMI is projected to grow from 58.6 to 59.

Traders will also keep an eye on the developments in the U.S. government bond markets after U.S. President Joe Biden unveiled his $2 trillion infrastructure plan. At this point, Treasury yields are moving lower, but the U.S. dollar remains strong.

Technical Analysis

GBP/USD is currently moving towards the support level at 1.3745. If GBP/USD manages to settle below this level, it will head towards the next support level which is located at 1.3710. GBP/USD has made several attempts to settle below this level in recent trading sessions but failed to develop sufficient downside momentum.

In case GBP/USD declines below the support at 1.3710, it will head towards the support at 1.3665. A move below this level will open the way to the test of the support at 1.3625.

On the upside, the nearest resistance level for GBP/USD is located at 1.3780. This resistance level has been tested during the current trading session and proved its strength.

If GBP/USD settles above the resistance at 1.3780, it will get to the test of the next resistance at 1.3800. A move above 1.3800 will push GBP/USD towards the resistance at the 50 EMA at 1.3815.

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