GBP/USD Daily Forecast – British Pound Moves Higher At The Start Of The Week
GBP/USD Video 12.10.20.
British Pound Remains Strong As Traders Bet On A Brexit Deal
GBP/USD managed to settle above 1.3000 and tries to continue its upside move as traders are optimistic that EU and UK will be able to negotiate a Brexit deal.
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Reports indicate that EU and Britain are moving closer to a deal. Currently, EU believes that the deal should be done by the start of November but also indicates that no deal is better than a bad deal.
The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, is currently testing the 93 level. In case the U.S. Dollar Index declines below this level, it will head towards the nearest material support level at 92.80 which will be bullish for GBP/USD.
There are no important economic reports scheduled to be released in the U.S. and UK today so GBP/USD trading dynamics will depend on Brexit news and general market mood. EUR/USD also looks ready to start the week on a positive note so traders continue to price in a favorable outcome of Brexit negotiations.
Technical Analysis
GBP/USD has settled above the resistance at 1.3000 and is currently trying to gain additional upside momentum. RSI is in the moderate territory so there is plenty of room to gain more momentum in case the right catalysts emerge.
In addition, the 20 EMA is about to cross the 50 EMA to the upside, suggesting the continuation of the upside trend.
The nearest resistance level for GBP/USD is located at 1.3110. In case GBP/USD settles above this level, it will head towards the next resistance level at 1.3160. If GBP/USD gets above the resistance at 1.3160, it will move towards the significant resistance level at 1.3270.
On the support side, the previous resistance at 1.3000 will serve as the first support level for GBP/USD. If GBP/USD moves below this level, it will head towards the next support at the 50 EMA at 1.2945.
A move below the 50 EMA will open the way to the test of the minor support level at 1.2890. In case GBP/USD declines below this support level, it will head towards the next support at 1.2815.
For a look at all of today’s economic events, check out our economic calendar.