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

GBP/USD Video 30.12.20.

British Pound Moves Higher Against U.S. Dollar

GBP/USD is currently trying to settle above the resistance at 1.3540 while the U.S. dollar continues to lose ground against a broad basket of currencies.

The U.S. Dollar Index is testing the support at the yearly lows at 89.75. If the U.S. Dollar Index settles below this level, it will gain additional downside momentum and head towards the next support which is located near 89.40 which will be bullish for GBP/USD. At this point, it looks like the American currency will remain under pressure on the foreign exchange market in the remaining trading sessions of this year.

Yesterday, the U.S. Senate did not vote on increasing COVID-19 stimulus checks, and the Senate Majority Leader Mitch McConnell tied the checks to other measures demanded by Trump but opposed by Democrats.

This move significantly decreased chances for bigger stimulus checks but traders ignored the development and continued to sell the U.S. dollar.

Today, the UK will provide Nationwide Housing Prices report for December which is projected to show that housing prices increased by 0.4% month-over-month. On a year-over-year basis, Nationwide Housing Prices are expected to grow by 6.7%.

Technical Analysis

GBP/USD is currently testing the nearest resistance level at 1.3540. RSI is in the moderate territory and there is plenty of room to gain momentum in case the right catalysts emerge.

If GBP/USD manages to settle above 1.3540, it will move towards the next resistance level at 1.3575. This resistance level has been tested in recent trading sessions and proved its strength.

A move above the resistance at 1.3575 will push GBP/USD towards the next resistance at the yearly highs at 1.3625. There are no important levels between 1.3575 and 1.3625 so this move may be fast.

On the support side, the nearest support level for GBP/USD is located at 1.3500. If GBP/USD declines below this level, it will get to the test of the support at 1.3485. A move below the support at 1.3485 will open the way to the test of the next support level which is located at the 20 EMA at 1.3450.

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