GBP/USD Daily Forecast – U.S. Dollar Pulls Back
GBP/USD Video 01.03.21.
British Pound Moves Higher Against U.S. Dollar
GBP/USD is currently trying to settle above the resistance at 1.3980 while the U.S. dollar is losing ground against a broad basket of currencies.
The U.S. Dollar Index did not manage to settle above the 91 level and tested the support at the 50 EMA at 90.65. If the U.S. Dollar Index settles below this level, it will head towards the support at the 20 EMA at 90.50 which will be bullish for GBP/USD.
Today, foreign exchange market traders will focus on the final readings of Manufacturing PMI reports from U.S. and UK. Analysts expect that UK Manufacturing PMI increased from 54.1 in January to 54.9 in February. In the U.S., Manufacturing PMI is projected to decline from 59.2 to 58.5.
It should be noted that China’s manufacturing segment has slowed down a bit as the country’s Manufacturing PMI declined from 51.5 in January to 50.9 in February compared to analyst consensus of 51.5. However, this decline did not put any pressure on riskier assets which continue to rebound after the recent sell-off.
GBP/USD is currently testing the nearest resistance level at 1.3980. If this test is successful, GBP/USD will move towards the next resistance at 1.4000. RSI declined back into the moderate territory after the recent sell-off so there is plenty of room to gain upside momentum in case the right catalysts emerge.
If GBP/USD settles above the resistance at 1.4000, it will head towards the next resistance level at 1.4030. A move above this level will open the way to the test of the resistance at 1.4050. In case GBP/USD gets above the resistance at 1.4050, it will move towards the resistance at 1.4080.
On the support side, the nearest support level for GBP/USD is located at 1.3950. If GBP/USD declines below this level, it will move towards the next support at the 20 EMA at 1.3930. In case GBP/USD settles below the 20 EMA, it will gain additional downside momentum and head towards the support at 1.3900.
For a look at all of today’s economic events, check out our economic calendar.