GBP/USD Daily Forecast – Attempt To Settle Above 1.3400

GBP/USD Video 02.12.20.

British Pound Continues To Move Higher

GBP/USD is currently trying to settle above the resistance at 1.3400 as the U.S. dollar continues to lose ground against a broad basket of currencies.

The U.S. Dollar Index managed to settle below the support at 91.50 and gained significant downside momentum. The next support level has emerged near 91.15. If the U.S. Dollar Index declines below this level, it will move towards the 91 level which will be bullish for GBP/USD.

Yesterday, UK reported that Manufacturing PMI increased from 53.7 in October to 55.6 in November compared to analyst consensus of 55.2. Meanwhile, Nationwide Housing Prices increased by 6.5% year-over-year in November while analysts expected growth of 5.5%. On a month-over-month basis, Nationwide Housing Prices increased by 0.9% as the housing market remained strong.

In the U.S., Manufacturing PMI increased from 53.4 in October to 56.7 in November, in line with analyst estimates.

Today, foreign exchange market traders will focus on the U.S. ADP Employment Change report which is projected to show that private businesses hired 400,000 workers in November. Traders will also keep an eye on any Brexit news that may emerge. Negotiations between EU and UK continue, and there is little time left to reach a compromise deal.

Technical Analysis

gbp usd december 2 2020

GBP/USD gained strong upside momentum and is currently trying to settle above the major resistance level at 1.3400. GBP/USD spent many trading sessions in a range between 1.3300 and 1.3400 so RSI remains in the moderate territory. Thus, there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

The next resistance level for GBP/USD is located at September highs at 1.3485. If GBP/USD manages to settle above this level, it will head towards the next resistance at 1.3515.

On the support side, GBP/USD needs to get back below 1.3400 to have a chance to develop downside momentum. A move below 1.3400 will push GBP/USD towards the next support level at 1.3325. If GBP/USD declines below this level, it will head towards the support at 1.3300.

For a look at all of today’s economic events, check out our economic calendar.