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GBP/USD Daily Forecast – British Pound Pulls Back

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·2 min read
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GBP/USD Video 12.05.21.

U.S. Dollar Gains Some Ground Against British Pound

GBP/USD is currently trying to settle below 1.4120 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle below the support at the 90 level and is testing the resistance at 90.30. This resistance level has already been tested several times in recent trading sessions and proved its strength. In case the U.S. Dollar Index settles above 90.30, it will gain additional upside momentum and head towards the next resistance at 90.50 which will be bearish for GBP/USD.

UK has just reported that first-quarter GDP declined by 1.5% quarter-over-quarter compared to analyst consensus which called for a decline of 1.6%. On a year-over-year basis, GDP decreased by 6.1%, in line with the analyst consensus.

UK has also released Industrial Production and Manufacturing Production reports. Industrial Production increased by 1.8% month-over-month in March compared to analyst consensus of 1% while Manufacturing Production grew by 2.1%.

The main event of the day for foreign exchange market traders is the release of U.S. inflation data which may have a material impact on currency dynamics. Analysts expect that Inflation Rate increased by 3.6% year-over-year in April while Core Inflation Rate grew by 2.3%.

Technical Analysis

GBP/USD did not manage to settle above the resistance at 1.4150 and declined towards the support at 1.4120. In case GBP/USD settles below this level, it will head towards the next support which is located at 1.4080.

A successful test of the support at 1.4080 will push GBP/USD towards the support at 1.4050. In case GBP/USD declines below 1.4050, it will move towards the support at 1.4020. A move below this level will open the way to the test of the support at 1.4000.

On the upside, the nearest resistance level for GBP/USD is located at 1.4150. If GBP/USD gets above this level, it will head towards the next resistance at 1.4180. A move above 1.4180 will push GBP/USD towards the resistance which is located at February highs at 1.4240.

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

This article was originally posted on FX Empire

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