GBP/USD Daily Forecast – U.S. Dollar Tries To Gain More Ground Against British Pound

GBP/USD Video 25.03.21.

British Pound Is Mostly Flat Against U.S. Dollar

GBP/USD is currently trying to settle below 1.3700 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is currently testing the nearest resistance level at 92.50. In case the U.S. Dollar Index manages to settle above this level, it will head towards the next resistance at 92.70 which will be bearish for GBP/USD.

Yesterday, UK reported that Inflation Rate grew by 0.1% month-over-month in February compared to analyst consensus which called for growth of 0.5%. On a year-over-year basis, Inflation Rate increased by 0.4%. Core Inflation Rate grew by 0.9% compared to analyst consensus of 1.4%. Inflation was much weaker than expected, highlighting the negative impact of the pandemic.

Meanwhile, flash readings of PMI reports for March were much stronger than expected. UK Manufacturing PMI increased from 55.1 in February to 57.9 in March compared to analyst consensus of 55. Services PMI grew from 49.5 to 56.8 while analysts expected that it would increase to 51. The success of mass vaccination program in UK and government’s plan to gradually lift virus-related restrictions served as bullish catalysts for both manufacturing and services segments.

Technical Analysis

GBP/USD managed to get below the support at 1.3710 and is currently trying to settle below 1.3700. In case this attempt is successful, GBP/USD will head towards the support level which is located at 1.3665.

If GBP/USD settles below the support at 1.3665, it will move towards the next support level at 1.3625. A successful test of the support at 1.3625 will open the way to the test of the support at 1.3575.

On the upside, the previous support at 1.3710 will serve as the first resistance level for GBP/USD. If GBP/USD manages to settle above this level, it will head towards the next resistance at 1.3745.

A move above the resistance at 1.3745 will open the way to the test of the resistance at 1.3780. If GBP/USD gets above the resistance at 1.3780, it will head towards the next resistance at 1.3800.

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