GBP/USD Daily Forecast – U.S. Dollar Tries To Gain Ground At The Start Of The Week

GBP/USD Video 05.04.21.

Test Of Support At 1.3820

GBP/USD is currently trying to settle below the support at the 50 EMA at 1.3820 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index managed to get back above the 93 level and is moving towards the resistance at 93.20. If the U.S. Dollar Index gets to the test of this level, GBP/USD will find itself under more pressure.

On Friday, U.S. provided Non Farm Payrolls report which indicated that the U.S. economy added 916,000 jobs in March. The report exceeded analyst consensus of 647,000. Unemployment Rate declined from 6.2% in February to 6% in March. The strong recovery of the U.S. job market pushed Treasury yields higher and provided support to the American currency.

Today, foreign exchange market traders will focus on the final reading of U.S. Services PMI report. Analysts expect that Services PMI increased from 59.8 in February to 60 in March as the services segment continued to recover from the blow dealt by the coronavirus pandemic.

Technical Analysis

GBP/USD is currently testing the support level at the 50 EMA at 1.3820. In case this test is successful, GBP/USD will head towards the next support at 1.3800. RSI is in the moderate territory, and there is plenty of room to gain downside momentum in case the right catalysts emerge.

In case GBP/USD declines below the support at 1.3800, it will move towards the next support level at 1.3780. A move below the support at 1.3780 will open the way to the test of the next support which is located at the recent lows at 1.3745.

On the upside, GBP/USD must settle above the 50 EMA at 1.3820 and the 20 EMA at 1.3825 to have a chance to develop upside momentum in the near term. The next resistance level for GBP/USD is located at 1.3865. If GBP/USD manages to settle above this level, it will head towards the next resistance at 1.3900. A move above this level will push GBP/USD towards the resistance at 1.3950.

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