GBP/USD Daily Forecast – British Pound Is Losing Ground Against U.S. Dollar
GBP/USD Video 23.10.20.
U.S. Dollar Continues To Move Higher Against British Pound
GBP/USD is trying to settle below 1.3050 as the U.S. dollar continues to gain ground against a broad basket of currencies.
The U.S Dollar Index managed to get above the resistance at 92.80 and attempts to gain additional upside momentum above the next resistance at 93.00 amid uncertainty over U.S. stimulus timing. If the U.S. Dollar Index settles above 93, it will move towards the resistance at the 20 EMA at 93.35 which will be bearish for GBP/USD.
UK has just released Retail Sales data for September. On a month-over-month basis, Retail Sales increased by 1.5% compared to analyst consensus which called for growth of 0.4%. Year-over-year, Retail Sales increased by 4.7% while analysts forecasted growth of 3.7%. The surprising strength of Retail Sales provides hopes for a robust recovery of consumer activity.
Later, UK will release flash PMI data for October. Manufacturing PMI is projected to decrease from 54.1 to 53.1 while Services PMI is expected to decline from 56.1 to 54. Numbers above 50 show expansion.
In addition to economic data, GBP/USD traders will continue to follow Brexit news and developments in U.S. stimulus negotiations. The optimism about a Brexit deal has recently pushed GBP/USD above 1.3150 but the pound lost upside momentum and is pulling back. Most likely, additional positive news on the Brexit front would be required to push GBP/USD towards 1.3200.
GBP/USD managed to get below the support at 1.3070 and continues its downside move. The next support level for GBP/USD is located at 1.3030. If GBP/USD declines below this level, it will move towards the support at 1.3000.
A move below the support at 1.3000 will open the way to the test of the support at the 20 EMA at 1.2980.
On the upside, the previous support level at 1.3070 will likely serve as the first resistance for GBP/USD. A move above this resistance level will push GBP/USD towards the next resistance at 1.3110.
In case GBP/USD manages to settle above 1.3110, it will gain additional upside momentum and head towards the next material resistance level at the recent highs at 1.3180.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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