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GBP/USD Daily Forecast – Test Of Resistance At 1.4180

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·2 min read
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GBP/USD Video 18.05.21.

British Pound Continues To Gain Ground Against U.S. Dollar

GBP/USD has recently made an attempt to settle above the resistance at 1.4180 while the U.S. dollar remained under pressure against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below the support at 90.30 and is trying to get to the test of the support at 90. In case the U.S. Dollar Index declines below 90, it will move towards the support at 89.75 which will be bullish for GBP/USD.

The UK has just reported that Claimant Count Change decreased from 10,100 in March to -15,100 in April compared to analyst consensus of 25,000. Unemployment Rate report for March showed that Unemployment Rate declined from 4.9% in February to 4.8% in March while analysts expected that it will remain unchanged at 4.9%. Both reports indicated that the UK job market continued to recover.

Today, foreign exchange market traders will also have a chance to take a look at the latest housing market data from the U.S. Analysts expect that Building Permits declined by 0.9% month-over-month in April after growing by 2.7% in March. Housing Starts are projected to decline by 2.8%.

It should be noted that Building Permits and Housing Starts stay near multi-year high levels so some correction on a month-over-month basis does not signal any notable weakness.

Technical Analysis

GBP/USD managed to get above the resistance at 1.4150 and is trying to settle above the next resistance at 1.4180. In case GBP/USD manages to settle above this level, it will head towards the resistance which is located at February highs at 1.4240.

A successful test of the resistance at 1.4240 will open the way to the test of the resistance at 1.4280. If GBP/USD gets above this level, it will head towards the next resistance at 1.4345. It should be noted that GBP/USD has not visited this territory since 2018 so it remains to be seen whether previous levels will be relevant for today’s trading.

On the support side, the previous resistance at 1.4150 will serve as the first support level for GBP/USD. If GBP/USD manages to settle below this level, it will move towards the support at 1.4120. A move below this level will open the way to the test of the support at 1.4080.

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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