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

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Vladimir Zernov
·2 min read
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GBP/USD Video 06.04.21.

British Pound Continues To Move Higher Against U.S. Dollar

GBP/USD managed to get above the resistance at 1.3900 and is moving higher while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index managed to settle below the support at 92.70 and made an attempt to get to the test of the next support level at 92.50. In case the U.S. Dollar Index declines below 92.50, it will head towards the support at the 20 EMA at 92.35 which will be bullish for GBP/USD.

Yesterday, U.S. reported that Services PMI increased from 59.8 in February to 60.4 in March compared to analyst consensus of 60. The report highlighted the strength of the economic rebound in the U.S. and boosted riskier assets.

Meanwhile, Treasury yields continue to pull back from recent highs which is bearish for the U.S. dollar. If this pullback continues, the American currency will find itself under more pressure on the foreign exchange market.

Technical Analysis

GBP/USD is currently trying to gain upside momentum above the resistance at 1.3900. RSI remains in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

If GBP/USD settles above 1.3900, it will head towards the next resistance level at 1.3950. A successful test of the resistance at 1.3950 will open the way to the test of the resistance at 1.3980.

In case GBP/USD gets above this level, it will move towards the resistance at 1.4000. This resistance level has been tested many times in March and proved its strength so GBP/USD will likely need additional catalysts to settle above 1.4000.

On the support side, a move below 1.3900 will push GBP/USD towards the support at 1.3865. If GBP/USD declines below this level, it will move towards the support at the 20 EMA at 1.3840. In case GBP/USD manages to settle below the 20 EMA, it will head towards the next support level which is located at the 50 EMA at 1.3825.

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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