GBP/USD Daily Forecast – U.S. Dollar Remains Under Serious Pressure

GBP/USD Video 18.11.20.

British Pound Continues To Move Higher Against U.S. Dollar

GBP/USD is testing the resistance at 1.3270 as the U.S. dollar continues to lose ground against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below the support at 92.50 and is trying to get to the test of the next support level at 92.10. If the U.S. Dollar Index moves below 92.10, it will head towards its yearly lows at 91.75 which will be bullish for GBP/USD.

Today, foreign exchange market traders will focus on Brexit news and inflation data from the UK. Time is running out for EU and UK to reach a compromise deal but recent reports suggest that both sides moved closer to a deal.

In recent trading sessions, the pound was supported by optimism about a successful deal so any negative news on this front will put serious pressure on the British currency.

The UK will soon provide Inflation Rate and Core Inflation Rate data for October. Inflation Rate is projected to decrease by 0.1% month-over-month as coronavirus continued to put pressure on consumer activity and prices. On a year-over-year basis, Inflation Rate is expected to grow by 0.6%.

Meanwhile, Core Inflation Rate is expected to increase by 1.3% year-over-year. Any weakness in inflation numbers will signal that UK economy is slowing down faster than expected due to coronavirus surge.

Technical Analysis

GBP/USD managed to settle above the resistance at 1.3210 and is trying to get above the next resistance level at 1.3270. If this attempt is successful, GBP/USD will move towards the next resistance level at 1.3325.

In case GBP/USD manages to settle above the resistance at 1.3325, it will gain additional upside momentum and head towards the resistance at 1.3400. There are no important levels between 1.3325 and 1.3400 so this move may be fast.

On the support side, the previous resistance at 1.3210 will likely serve as the first support level for GBP/USD. If GBP/USD declines below this level, it will head towards the next support level at 1.3180. A move below 1.3180 will open the way to the test of the next support at 1.3140.

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