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

U.S. Dollar Gains Ground Against British Pound

GBP/USD is currently trying to settle back below the support level at 1.3460 while U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to get above the resistance at 96.25 and is trying to get to the test of the next resistance level at 96.50. In case this attempt is successful, GBP/USD will move lower.

Today, foreign exchange market traders will take a look at the final reading of UK Manufacturing PMI report for December. Analysts expect that UK Manufacturing PMI declined from 58.1 in November to 57.6 in December.

In the U.S., traders will focus on ISM Manufacturing PMI report which is projected to show that ISM Manufacturing PMI declined from 61.1 in November to 60.1 in December.

Traders will also keep an eye on the developments in U.S. government bond markets after the recent increase in Treasury yields. In case Treasury yields continue to gain ground, U.S. dollar may get more support.

Technical Analysis

GBP/USD managed to settle below the support at 1.3500 and is trying to get below the next support level which is located at 1.3460. In case this attempt is successful, GBP/USD will head towards the next support which is located near the recent lows at 1.3440.

A move below the support at 1.3440 will open the way to the test of the support at 1.3420. In case GBP/USD declines below 1.3420, it will head towards the 50 EMA which is located near 1.3410. The 20 EMA is located in the nearby so GBP/USD will likely get material support near this level.

On the upside, GBP/USD needs to get back above 1.3500 to have a chance to develop upside momentum in the near term. The next resistance level for GBP/USD is located at 1.3515.

If GBP/USD settles above the resistance at 1.3515, it will head towards the next resistance at 1.3535. A move above this level will open the way to the test of the resistance at 1.3550.

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