GBP/USD Daily Forecast – U.S. Dollar Tries To Gain Some Ground At The Start Of The Week
British Pound Is Mostly Flat Against U.S. Dollar
GBP/USD is currently trying to settle below the support at 1.3745 while the U.S. dollar is losing some ground against a broad basket of currencies.
The U.S. Dollar Index is currently testing the nearest resistance level which is located at 92.80. In case this test is successful, the U.S. Dollar Index will move towards the next support level at the 20 EMA at 92.45 which will be bullish for GBP/USD.
On Friday, UK reported that Manufacturing PMI declined from 63.9 in June to 60.4 in July compared to analyst consensus of 62.5. Services PMI decreased from 62.4 to 57.8 compared to analyst consensus of 62. Reports indicated that the new wave of coronavirus in UK has put some pressure on the country’s economy.
Today, foreign exchange market traders will have a chance to take a look at New Home Sales data from U.S. Analysts expect that New Home Sales increased by 3.5% month-over-month in June after declining by 5.9% in May.
Technical Analysis
GBP/USD is testing the support level at 1.3745. In case this test is successful, GBP/USD will gain additional downside momentum and head towards the next support level which is located at 1.3710.
A move below the support at 1.3710 will open the way to the test of the support at 1.3670. In case GBP/USD declines below this level, it will head towards the next support level at 1.3635.
On the upside, GBP/USD needs to stay above 1.3745 to have a chance to develop upside momentum in the near term. If GBP/USD manages to stay above this level, it will have a good chance to get to the test of the resistance at 1.3780.
A move above 1.3780 will lead to the test of the 20 EMA at 1.3790. If GBP/USD gets above the 20 EMA, it will get to the test of the resistance at 1.3800. A successful test of this level will push GBP/USD towards the next resistance level which is located 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
