GBP/USD Daily Forecast – U.S. Dollar Moves Higher Ahead Of Fed Interest Rate Decision
British Pound Is Losing Ground Against U.S. Dollar
GBP/USD continues its attempts to settle below the support at 1.3665 while the U.S. dollar is gaining some ground against a broad basket of currencies.
The U.S. Dollar Index is currently located in a tight range between 93.20 and 93.30. In case the U.S. Dollar Index gets above 93.30, it will move towards the resistance level at 93.40 which will be bearish for GBP/USD.
Today, foreign exchange market traders will have a chance to take a look at Existing Home Sales report for August. Analysts expect that Existing Home Sales declined by 1.3% month-over-month after growing by 2% in July.
This report will likely have minimal impact on currency dynamics as traders will focus on Fed Interest Rate Decision and the subsequent commentary. Fed Chair Jerome Powell will provide an update on Fed’s economic projections and reveal Fed’s thoughts on the reduction of the asset purchase program.
Fed’s commentary may have a major impact on markets today so trading will likely remain choppy until traders get the new information from Powell.
Technical Analysis
GBP/USD is testing the support level at 1.3665. In case this test is successful, GBP/USD will get to the test of the next support level which is located at 1.3635.
If GBP/USD manages to settle below the support at 1.3635, it will continue its downside move and head towards the support at August lows at 1.3600. A move below 1.3600 will push GBP/USD towards the next support which is located at July lows at 1.3575.
On the upside, GBP/USD needs to settle back above 1.3665 to have a chance to develop upside momentum in the near term. The next resistance level for GBP/USD is located at 1.3690.
In case GBP/USD settles above the resistance at 1.3690, it will move towards the next resistance level at 1.3710. A successful test of this level will open the way to the test of the next resistance at 1.3745.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
