GBP/USD Daily Forecast – U.S. Dollar Moves Higher In A Volatile Trading Session

GBP/USD Video 04.11.20.

British Pound Is Losing Ground Against U.S. Dollar

GBP/USD has settled near 1.3000 as the U.S. dollar is gaining ground against a broad basket of currencies while markets try to guess the winner of the U.S. presidential election.

The U.S. Dollar Index made an attempt to settle above the 94 level but faced resistance at 94.30 as traders reacted to increased odds of a Trump win. If the U.S. Dollar Index manages to settle above 94.30, it will head towards September highs at 94.75 which will be bearish for GBP/USD.

Today, the UK will release Services PMI report for October. Analysts expect that Services PMI will decrease from 56.1 in September to 52.3 in October. Numbers above 50 show expansion.

In the U.S., Services PMI is expected to increase from 54.6 in September to 56 in October. In addition, the U.S. will release ADP Employment Change report for October which is projected to show that private businesses added 650,000 jobs.

I’d note that economic data may have a limited impact on GBP/USD trading dynamics today as traders will focus on the main event of the week – the U.S. presidential election.

Technical Analysis

GBP/USD has mostly ignored support and resistance levels as traders focused on the U.S. presidential election. Most likely, GBP/USD will remain highly volatile during today’s trading session and will easily move between levels.

The nearest support for GBP/USD is located at the 20 EMA at 1.2990. If GBP/USD manages to settle below this level, it will head towards the next support level at the 50 EMA at 1.2970. A move below the 50 EMA will push GBP/USD towards the recent lows at 1.2935.

On the upside, GBP/USD needs to settle above 1.3000 to have a chance to develop upside momentum. In this case, GBP/USD will likely face some resistance near 1.3070. A move above 1.3070 will open the way to the test of the recent highs at 1.3140 although GBP/USD may also face resistance near 1.3110. If GBP/USD manages to settle above 1.3140, it will move towards October highs near 1.3180.

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