GBP/USD Daily Forecast – U.S. Dollar Is Under Pressure Against British Pound

GBP/USD Video 25.05.21.

British Pound Gains Ground Against U.S. Dollar

GBP/USD is currently trying to settle above the resistance at 1.4180 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is testing the support level at 89.75. This support level has been tested many times and proved its strength. If the U.S. Dollar Index settles below this level, it will gain additional downside momentum and head towards the support at 89.50 which will be bullish for GBP/USD.

Today, foreign exchange market traders will focus on the economic data from the U.S. Analysts expect that New Home Sales declined by 10% month-over-month in April after growing by 20.7% in March. It should be noted that New Home Sales are expected to stay close to multi-year high levels.

CB Consumer Confidence report is projected to show that Consumer Confidence declined from 121.7 in April to 119.4 in May. Analysts estimate that Case-Shiller Home Price Index increased by 0.9% month-over-month in March. On a year-over-year basis, Case-Shiller Home Price Index is projected to grow by 12.1%.

Technical Analysis

GBP/USD is currently testing the resistance at 1.4180. The next resistance level for GBP/USD is located at 1.4200. In case GBP/USD manages to settle above this level, it will head towards the resistance at 1.4240.

A successful test of the resistance at 1.4240 will push GBP/USD towards the resistance at 1.4280. If GBP/USD gets above this level, it will head towards the next resistance level which is located at 1.4345. I’d note that GBP/USD has not visited this territory since 2018 so it is not clear whether previous levels will be relevant for today’s trading.

On the support side, a move below 1.4180 will push GBP/USD back towards the support at 1.4150. In case GBP/USD settles below this level, it will move towards the support at 1.4100. A successful test of the support at 1.4100 will open the way to the test of the next support level which is located at the 20 EMA at 1.4085.

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