GBP/USD Daily Forecast – U.S. Dollar Stays Strong Against British Pound
GBP/USD Video 24.03.21.
British Pound Continues To Lose Ground Against U.S. Dollar
GBP/USD is currently trying to settle below the support at 1.3710 while the U.S. dollar continues to gain ground against a broad basket of currencies.
The U.S. Dollar Index managed to settle above the resistance at 92.25 and is moving towards the next resistance level at 92.50. If the U.S. Dollar Index manages to settle above this level, it will gain additional upside momentum which will be bearish for GBP/USD.
Yesterday, UK provided Claimant Count Change report which indicated that the number of people claiming unemployment benefits grew by 86,600 in February compared to analyst consensus which called for a decline of 17,000.
Today, foreign exchange market traders will focus on additional economic data from the UK. Analysts expect that Inflation Rate increased by 0.5% month-over-month in February. On a year-over-year basis, Inflation Rate is projected to grow by 0.8%. Core Inflation Rate is expected to increase by 1.4%. At this point, there are no signs of any material inflation as the economy remains under pressure from virus containment measures.
UK will also provide flash readings of Manufacturing PMI and Services PMI reports for March. Manufacturing PMI is expected to decline from 55.1 in February to 55 in March while Services PMI is projected to increase from 49.5 to 51. Numbers above 50 show expansion.
GBP/USD managed to settle below the major support level at 1.3745 and is trying to settle below the next support at 1.3710. In case this attempt is successful, GBP/USD will head towards the support at 1.3665.
A move below the support at 1.3665 will open the way to the test of the support at 1.3625. If GBP/USD declines below this level, it will head towards the support at 1.3575.
On the upside, the previous support level at 1.3745 will serve as the first resistance level for GBP/USD. If GBP/USD settles above this level, it will head towards the 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.
For a look at all of today’s economic events, check out our economic calendar.