GBP/USD Daily Forecast – U.S. Dollar Moves Lower As Treasury Yields Pull Back

British Pound Tries To Rebound Against U.S. Dollar

GBP/USD has recently made an attempt to settle below the support at 1.3310 but failed to develop sufficient downside momentum while the U.S. dollar found itself under pressure against a broad basket of currencies.

The U.S. Dollar Index moved back below 96.25 and is trying to settle below the next support at the 96 level. In case the U.S. Dollar Index manages to settle below this level, it will gain additional downside momentum and head towards the support at 95.75 which will be bullish for GBP/USD.

Today, foreign exchange market traders will have a chance to take a look at Case-Shiller Home Price Index from U.S. Analysts expect that Case-Shiller Home Price Index increased by 19.3% year-over-year in September.

Traders will also monitor the developments in U.S. government bond markets. Treasury yields continued to move lower after Moderna CEO said that vaccines would be less effective against the new variant of coronavirus. Rising yields have provided material support to the American currency in recent weeks, and the current pullback in yields hurts the U.S. dollar.

Technical Analysis

GBP/USD failed to settle below the support at 1.3310 and is trying to rebound. The nearest resistance level for GBP/USD is located at 1.3350. If GBP/USD gets above this level, it will head towards the next resistance at 1.3375.

A successful test of the resistance at 1.3375 will open the way to the test of the next resistance level at 1.3400. In case GBP/USD manages to settle above this level, it will head towards the resistance at the 20 EMA at 1.3415.

On the support side, GBP/USD needs to settle below 1.3310 to have a chance to develop additional downside momentum in the near term. The next support level for GBP/USD is located at 1.3280.

A move below the support level at 1.3280 will open the way to the test of the next support at 1.3250. In case GBP/USD settles below 1.3250, it will head towards the support at 1.3230.

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