GBP/USD Daily Forecast – Test Of Support At 1.4050
GBP/USD Video 13.05.21.
U.S. Dollar Tries To Gain More Ground Against British Pound
GBP/USD is currently trying to settle below the support at 1.4050 while the U.S. dollar is flat against a broad basket of currencies.
The U.S. Dollar Index managed to get above the resistance at 90.70 and is trying to continue its upside move. The next resistance level for the U.S. Dollar Index is located at 91. In case the U.S. Dollar Index gets to the test of this level, GBP/USD will find itself under more pressure.
Yesterday, U.S. reported that Inflation Rate increased by 4.2% year-over-year in April compared to analyst consensus of 3.6% while Core Inflation Rate grew by 3% compared to analyst consensus of 2.3%.
Inflation data shocked markets, and the U.S. dollar gained upside momentum. Meanwhile, the yields of 10-year Treasury yields moved from 1.60% to 1.70% as traders bet on higher inflation. If Treasury yields continue to increase, the U.S. dollar will get more support.
Today, foreign exchange market traders will focus on employment data from the U.S. Analysts expect that Initial Jobless Claims report will show that 490,000 Americans filed for unemployment benefits in a week. Continuing Jobless Claims are projected to decline from 3.69 million to 3.66 million.
Technical Analysis
GBP/USD settled below the support at 1.4080 and is testing the next support level at 1.4050. In case GBP/USD manages to settle below this level, it will head towards the next support at 1.4020.
A move below the support at 1.4020 will open the way to the test of the support at 1.4000. In case GBP/USD settles below 1.4000, it will head towards the next support level at 1.3980.
On the upside, the previous support at 1.4080 will serve as the first resistance level for GBP/USD. If GBP/USD manages to settle above this level, it will head towards the next resistance at 1.4120. A successful test of this level will open the way to the test of the resistance which is located near the recent highs at 1.4150.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
