GBP/USD Daily Forecast – U.S. Dollar Moves Higher Ahead Of Non Farm Payrolls Report

British Pound Is Under Some Pressure Against U.S. Dollar

GBP/USD is currently trying to settle back below the support level at 1.3920 while the U.S. dollar is moving higher against a broad basket of currencies.

The U.S. Dollar Index is testing the resistance level at the 20 EMA at 92.30. In case this test is successful, the U.S. Dollar Index will move towards 92.50 which will be bearish for GBP/USD.

Yesterday, the Bank of England left the interest rate unchanged at 0.1% and maintained its asset purchase program. There were no surprises in BoE commentary, and it had little impact on foreign exchange market dynamics.

Today, traders will focus on job market data from U.S. Non Farm Payrolls report is expected to show that U.S. economy added 870,000 jobs in July. However, it remains to be seen whether this report will meet expectations after ADP Employment Change report indicated that private businesses hired just 330,000 workers in July compared to analyst consensus of 695,000.

Traders will also have a chance to take a look at Unemployment Rate report which is projected to indicate that Unemployment Rate declined from 5.9% in June to 5.7% in July.

Technical Analysis

GBP/USD did not manage to settle above the resistance at 1.3950 and is trying to get below the support at 1.3920. In case this attempt is successful, GBP/USD will move back towards the support at 1.3900.

A move below the support at 1.3900 will push GBP/USD towards the support at the 50 EMA at 1.3885. In case GBP/USD gets below the 50 EMA, it will head towards the support at the 20 EMA at 1.3870. If GBP/USD manages to settle below this level, it will head towards the support at 1.3835.

On the upside, the nearest resistance level for GBP/USD is located at 1.3950. A successful test of this level will open the way to the test of the next resistance at 1.3980. If GBP/USD settles above 1.3980, it will get to the test of the resistance at 1.4000.

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