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

GBP/USD Video 19.05.21.

British Pound Continues To Gain Ground Against U.S. Dollar

GBP/USD managed to get above the resistance at 1.4180 and is moving higher while the U.S. dollar is under pressure against a broad basket of currencies.

The U.S. Dollar Index settled below the support at the 90 level and is testing the next support level at 89.75. In case this test is successful, the U.S. Dollar Index will head towards 89.50 which will be bullish for GBP/USD.

UK has just reported that Inflation Rate increased by 0.6% month-over-month in April, in line with the analyst consensus. On a year-over-year basis, Inflation Rate grew by 1.5% compared to analyst consensus which called for growth of 1.4%. Core Inflation Rate increased by 1.3% year-over-year, in line with the analyst consensus.

Pricing pressure was more visible on the producer side. Producer Prices increased by 3.9% year-over-year in April compared to analsyt consensus which called for growth of 3.5%. Core Producer Prices increased by 2.5% year-over-year compared to analyst forecast of 1.9%.

Today, foreign exchange market traders will have a chance to take a look at the latest FOMC Minutes. Recent dovish commentary from Fed officials served as a major bearish catalyst for the U.S. dollar, and the release of FOMC Minutes may have a material impact on currency dynamics.

Technical Analysis

GBP/USD is currently trying to get above 1.4200. In case this attempt is successful, GBP/USD will head towards the resistance at 1.4240. RSI is close to the overbought territory, but there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

If GBP/USD manages to settle above 1.4240, it will head towards the next resistance at 1.4280. A successful test of this level will open the way to the test of the resistance at 1.4345.

On the support side, a move below 1.4180 will push GBP/USD towards the support at 1.4150. If GBP/USD declines below this level, it will head towards the support at 1.4120. A successful test of the support at 1.4120 will open the way to the test of the support at 1.4080.

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