GBP/USD Daily Forecast – U.S. Dollar Is Strong At The Start Of The Week

GBP/USD Video 15.03.21.

U.S. Dollar Is Gaining Ground Against British Pound

GBP/USD is currently trying to settle below the support at the 20 EMA at 1.3915 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the resistance at 91.75 and is moving towards the next resistance level which is located at 92. If the U.S. Dollar Index gets to the test of this level, GBP/USD will find itself under more pressure.

Today, the U.S is expected to report that NY Empire State Manufacturing Index increased from 12.1 in February to 14.5 in March as the economy continued to rebound. It remains to be seen whether this report will have a material impact on GBP/USD dynamics. Meanwhile, foreign exchange market traders will remain focused on the developments in the U.S. government bond market.

Treasury yields continued to move higher at the start of the week. The yield of 10-year Treasuries is trying to settle above 1.64% while the yield of 30-year Treasuries is testing the 2.40% level. If Treasury yields get to new highs, the U.S. dollar will get additional support.

Technical Analysis

GBP/USD is currently testing the support at the 20 EMA at 1.3915. If this test is successful, GBP/USD will head towards the next support level which is located at 1.3865.

In case GBP/USD declines below the support at 1.3865, it will head towards the next support at 1.3835. A move below the support at 1.3835 will open the way to the test of the support at 1.3825.

On the upside, the nearest resistance level for GBP/USD is located at 1.3950. This resistance level has been recently tested and proved its strength. If GBP/USD manages to get above this level, it will head towards the next resistance at 1.3980. A move above the resistance at 1.3980 will push GBP/USD towards the next resistance at 1.4000.

From a big picture point of view, GBP/USD needs to stay in the 1.3900 – 1.4000 range to have a chance to develop additional upside momentum in the near term. A move below the support at 1.3900 will be a welcome development for GBP/USD bears.

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