GBP/USD Daily Forecast – U.S. Dollar Is Losing Ground Against British Pound
GBP/USD Video 01.12.20.
British Pound Rebounds After Yesterday’s Pullback
GBP/USD did not manage to settle below 1.3300 and rebounded back above 1.3350 as the U.S. dollar failed to continue its rebound against a broad basket of currencies.
Yesterday, the U.S. Dollar Index managed to get below the support at the yearly lows at 91.75 and tried to develop additional downside momentum. However, it received strong support at 91.50 and made an attempt to settle above the 92 level.
This attempt yielded no results, and the U.S. Dollar Index is moving towards another test of the support at 91.75. If this test is successful, the U.S. Dollar Index will head towards recent lows at 91.50 which will be bullish for GBP/USD.
On Monday, U.S. reported that Pending Home Sales decreased by 1.1% compared to analyst consensus which called for growth of 1%. Coronavirus surge and rising home prices have started to put some pressure on the U.S. housing market.
Today, UK will provide Nationwide Housing Prices report for November. Analysts expect that Nationwide Housing Prices increased by 0.3% month-over-month after growing by 0.8% in October. On a year-over-year basis, Nationwide Housing Prices are projected to grow by 5.5%.
Foreign exchange market traders will also have a chance to evaluate the final reading of UK Manufacturing PMI report. According to analyst forecast, Manufacturing PMI is expected to increase from 53.7 in October to 55.2 in November.
GBP/USD made several attempts to settle below the support at 1.3300 but failed to develop sufficient downside momentum. Currently, GBP/USD is trying to get to the test of the major resistance level at 1.3400.
This resistance level has already been tested many times and proved its strength. Most likely, GBP/USD will need additional catalysts to get above this level. These catalysts may include general weakness of the U.S. dollar or positive news on the Brexit front. If GBP/USD manages to get above the resistance at 1.3400, it will head towards the next resistance level at 1.3485.
On the support side, the nearest support level for GBP/USD is located at 1.3325. If GBP/USD declines below this level, it will head towards the next support at 1.3300. A move below 1.3300 will open the way to the test of the support at 1.3270.
For a look at all of today’s economic events, check out our economic calendar.