GBP/USD Daily Forecast – U.S. Dollar Gains Ground Ahead Of Non Farm Payrolls Data

GBP/USD Video 04.06.21.

U.S. Dollar Continues To Move Higher Against British Pound

GBP/USD is currently trying to settle below the support at 1.4100 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index managed to settle above the resistance at 90.50 and is moving towards the next resistance level which is located at the 50 EMA at 90.70. If the U.S. Dollar Index settles above the 50 EMA, it will move towards the resistance at 90.90 which will be bearish for GBP/USD.

Yesterday, U.S. released ADP Employment Change report which showed that private businesses hired 978,000 workers in May compared to analyst consensus of 650,000. The strong report provided significant support to the U.S. dollar.

Today, foreign exchange market traders will have a chance to take a look at additional job market data from the U.S. Analysts expect that Non Farm Payrolls report will indicate that the economy added 650,000 jobs in May.

It should be noted that ADP Employment Change and Non Farm Payrolls reports often provide mixed signals, so strong ADP Employment Change report does not guarantee the strength of Non Farm Payrolls report.

Unemployment Rate is projected to decline from 6.1% in April to 5.9% in May. While Unemployment Rate is an important catalyst, markets will likely focus on Non Farm Payrolls data today.

Technical Analysis

GBP/USD managed to settle below the 20 EMA at 1.4125 and is trying to settle below the next support level at 1.4100. In case this attempt is successful, GBP/USD will head towards the next support at 1.4080.

A move below 1.4080 will open the way to the test of the support at 1.4050. If GBP/USD declines below this level, it will head towards the 50 EMA at 1.4030.

On the upside, the previous support at the 20 EMA at 1.4125 will serve as the first resistance level for GBP/USD. If GBP/USD gets above this level, it will move towards the next resistance at 1.4150. A successful test of this level will push GBP/USD towards the resistance at 1.4180.

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