GBP/USD Daily Forecast – Attempt To Settle Above Resistance At 1.2750
GBP/USD Video 25.09.20.
British Pound Tries To Continue Its Rebound
GBP/USD is currently trying to settle above the nearest resistance level 1.2750 as the U.S. dollar is flat against a broad basket of currencies.
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Yesterday, the U.S. Dollar Index made an attempt to get to the test of the significant resistance level at 94.65. However, the U.S. Dollar Index failed to settle above 94.50 and pulled back closer to 94.30.
If the U.S. Dollar Index continues its pullback, GBP/USD will have a good chance to develop additional upside momentum above 1.2750.
According to reports, U.S. Democrats prepare to offer a revised $2.2 trillion coronavirus aid package but it remains to be seen whether they will be ready to achieve any consensus with Republicans.
Yesterday’s Initial Jobless Claims report indicated that 870,000 Americans filed for unemployment benefits in a week. The number of Initial Jobless Claims is still very high, and the economy clearly needs another stimulus package.
Theoretically, the latest economic data should push Republicans and Democrats to continue negotiations. However, it looks like traders do not believe that Republicans and Democrats will be able to make a deal before the election in November so news about the potential new package have little impact on the markets.
Technical Analysis
GBP/USD is testing the nearest resistance level at 1.2750. If this test is successful, GBP/USD will head towards the next resistance at 1.2780.
This resistance level has already been tested two times and proved its strength. If GBP/USD manages to settle above 1.2780, it will gain additional upside momentum and head towards the next significant resistance level at 1.2880.
A move above the resistance at 1.2880 will open the way to the test of the next resistance level at the 20 EMA at 1.2910.
On the support side, the nearest significant support level for GBP/USD is located at 1.2650. In recent trading sessions, GBP/USD tried to get to the test of this level but found some support at 1.2675.
In case GBP/USD moves below the support at 1.2650, it will gain significant downside momentum and head towards the next support level at 1.2550.
For a look at all of today’s economic events, check out our economic calendar.