GBP/USD Daily Forecast – British Pound Stays Stuck In A Tight Range
GBP/USD Video 07.05.21.
British Pound Continues Its Attempts To Gain More Ground Against U.S. Dollar
GBP/USD remains stuck near the resistance level at 1.3900 while the U.S. dollar is flat against a broad basket of currencies.
The U.S. Dollar Index managed to get below the support at the 91 level and is trying to develop additional downside momentum. In case this attempt is successful, the U.S. Dollar Index will head towards the next support level at 90.70 which will be bullish for GBP/USD.
Yesterday, the Bank of England left the interest rate unchanged at 0.1%, in line with the analyst consensus. The Bank decided to continue with the existing asset purchase programme, and kept the total target for asset purchases at 895 billion pounds. There were no surprises in Bank’s decision and commentary, so its monetary policy decision had little impact on GBP/USD.
Today, foreign exchange market traders will focus on the employment data from the U.S. Analysts expect that Non Farm Payrolls report will indicate that the U.S. economy added 978,000 jobs in April after creating 916,000 jobs in March. Unemployment Rate is projected to decline from 6% in March to 5.8% in April as the situation in the job market continues to stabilize.
Technical Analysis
The technical picture for GBP/USD has not changed much in recent trading sessions as GBP/USD remains stuck near the 1.3900 level. The next resistance for GBP/USD is located at 1.3920.
If GBP/USD settles above the resistance at 1.3920, it will move towards the next resistance level at 1.3950. A successful test of the resistance at 1.3950 will push GBP/USD towards the resistance at 1.3980. If GBP/USD manages to settle above this level, it will head towards the next resistance at 1.4000.
On the support side, the nearest support level for GBP/USD is located at the 20 EMA at 1.3880. In case GBP/USD declines below the 20 EMA, it will move towards the 50 EMA at 1.3850. A move below the 50 EMA will push GBP/USD towards the support at 1.3800.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
