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GBP/USD Daily Forecast – British Pound Tries To Continue Its Upside Move

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GBP/USD Video 13.10.20.

Bank Of England Asks Banks Whether They Are Ready For Negative Interest Rates

GBP/USD is currently trying to settle above 1.3050 while the U.S. dollar is gaining some ground against a broad basket of currencies.

Currently, the U.S. Dollar Index continues its attempts to get above the nearest resistance level which has emerged in the 93.20 – 93.25 area. In case the U.S. Dollar Index manages to settle above this resistance area, it will gain upside momentum which will be bearish for GBP/USD.

Yesterday, the Bank of England stated that it had an open mind about the possibility of pushing interest rates below zero. In addition, the Bank of England asked banks about their readiness for zero or sub-zero interest rates.

At this point, potential risks of negative interest rates had no impact on GBP/USD because traders are focused on Brexit negotiations. However, traders should certainly keep a close eye on this story.

UK has just provided Claimant Count Change report for September which indicated that the number of people claiming for unemployment benefits increased by 28,000. Analysts believed that Claimant Count Change report would show an increase of 78,800.

Meanwhile, Unemployment Rate increased from 4.1% in July to 4.5% in August compared to analyst consensus of 4.3%. On Monday, UK Prime Minister Boris Johnson announced new virus containment measures which included closure of pubs in hard-hit areas, so the situation on the job front is set to remain challenging.

Technical Analysis

GBP/USD is trying to stay above 1.3050 and continue its upside move. The nearest significant resistance level for GBP/USD is located at 1.3110. The 20 EMA has just crossed the 50 EMA to the upside, suggesting the continuation of the current upside trend.

If GBP/USD manages to settle above this level, it will gain upside momentum and head towards the next resistance at 1.3160. A move above 1.3160 will open the way to the test of the next material resistance level at 1.3270.

On the support side, the nearest support is located at 1.3000. A move below this level will push GBP/USD towards the next support at the 50 EMA at 1.2950.

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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