GBP/USD

GBP/USD Daily Forecast – Support At 1.3000 Stays Strong

GBP/USD Video 27.10.20.

British Pound Rebounds Against U.S. Dollar

GBP/USD failed to settle below 1.3000 and is trying to get back above 1.3030 as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently made an attempt to gain upside momentum above the 93 level amid worries about the second wave of the virus and stimulus uncertainty. This attempt was not successful, and the U.S. Dollar Index pulled back below 93.

The nearest support level for the U.S. Dollar Index is located at 92.80. If the U.S. Dollar Index manages to settle below this level, it will gain additional downside momentum which will be bullish for GBP/USD.

Today, GBP/USD traders will take a look at U.S. Durable Goods Orders data for September. Analysts expect that Durable Goods Orders have increased by 0.5% month-over-month in September.

This report is especially interesting after yesterday’s U.S. New Home Sales report which indicated that New Home Sales decreased by 3.5% month-over-month in September while analysts expected growth of 2.8%. Another disappointing report may provide additional support to safe haven currencies like the U.S. dollar.

Technical Analysis

GBP/USD

Yesterday, GBP/USD tested the support level at 1.3000 but did not manage to gain additional downside momentum. Currently, GBP/USD is trying to settle above the nearest resistance level at 1.3030.

In case GBP/USD manages to settle above this level, it will head towards the next resistance at 1.3070. A move above the resistance at 1.3070 will open the way to the test of the next resistance level at 1.3110.

If GBP/USD is able to get above 1.3110, it will develop additional upside momentum and head towards October highs near 1.3180. RSI is in the moderate territory so there is plenty of room to develop momentum in case the right catalysts emerge.

On the support side, the nearest support level for GBP/USD is located near the 20 EMA at 1.3000. If GBP/USD moves below the 20 EMA, it will gain additional downside momentum and head towards the next support at the 50 EMA at 1.2970.  A move below the 50 EMA will signal that GBP/USD will try to establish a new downside trend.

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