GBP/USD Daily Forecast – U.S. Dollar Remains Strong Against British Pound

GBP/USD Video 31.03.21.

British Pound Remains Under Pressure Against U.S. Dollar

GBP/USD managed to settle below the support at 1.3745 and is moving towards the next support level at 1.3710 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to settle above the resistance at 93.20 and is testing the next resistance level which is located at 93.40. In case this test is successful, the U.S. Dollar Index will head towards the resistance at 93.65 which will be bearish for GBP/USD.

UK has recently provided the final reading of the fourth-quarter GDP Growth Rate report which indicated that GDP increased by 1.3% quarter-over-quarter compared to analyst consensus which called for growth of 1%.

UK has also reported that Nationwide Housing Prices declined by 0.2% month-over-month in March compared to analyst consensus which called for growth of 0.4%. This is an interesting development which shows that the period of strong growth in the UK housing market may be coming to an end, but it remains to be seen whether the report will have any notable impact on pound’s dynamics on the foreign exchange market.

Technical Analysis

GBP/USD settled below the support at 1.3745 and is trying to get to the test of the next support level which is located at 1.3710. This support level has been tested during yesterday’s trading session and proved its strength.

If GBP/USD declines below the support at 1.3710, it will head towards the next support which is located at 1.3665. RSI remains in the moderate territory, so there is plenty of room to gain downside momentum in case the right catalysts emerge. If GBP/USD settles below the support at 1.3665, it will move towards the support at 1.3625.

On the upside, the previous support level at 1.3745 will serve as the first resistance level for GBP/USD. If GBP/USD gets above this level, it will head towards the next resistance at 1.3780.

A move above the resistance at 1.3780 will open the way to the test of the resistance at 1.3800. In case GBP/USD manages to settle above 1.3800, it will head towards the resistance which is located at the 50 EMA at 1.3815.

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