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GBP/USD Daily Forecast – U.S. Dollar Gains Ground At The Start Of The Week

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·2 min read
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British Pound Pulls Back

GBP/USD is currently moving towards the support level at 1.3710 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get above the 94 level and is trying to get to the test of the resistance at 94.20. In case the U.S. Dollar Index settles above 94.20, it will head towards the next resistance at 94.50 which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the economic reports from U.S. Analysts expect that Industrial Production increased by 0.2% month-over-month in September. On a year-over-year basis, Industrial Production is projected to grow by 5.7%. Manufacturing Production is expected to increase by 0.1% month-over-month.

Traders will also keep an eye on the developments in U.S. government bond markets. The yield of 10-year Treasuries managed to gain upside momentum after the recent pullback and is trying to settle above 1.60%. In case this attempt is successful, the yield of 10-year Treasuries will move towards the recent highs near 1.64% which will be bullish for the U.S. dollar.

Technical Analysis

GBP/USD declined below 1.3745 and is trying to get to the test of the support level at 1.3710. In case GBP/USD settles below this level, it will move towards the next support at 1.3690.

The 50 EMA is located near 1.3700, so GBP/USD will likely get material support in the 1.3690 – 1.3710 area. A successful test of the support at 1.3690 will open the way to the test of the next support level which is located at 1.3665.

On the upside, the nearest resistance level for GBP/USD is located at 1.3745. If GBP/USD gets back above this level, it will move towards the next resistance at 1.3780.

A move above 1.3780 will push GBP/USD towards the resistance at 1.3800. In case GBP/USD manages to settle above the resistance at 1.3800, it will continue its upside move and head towards the next resistance at 1.3835.

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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