GBP/USD Daily Forecast – British Pound Quickly Rebounds After Sell-Off
GBP/USD Video 03.12.20.
U.S. Dollar Failed To Gain Upside Momentum Against British Pound
GBP/USD is currently trying to get to another test of the resistance at 1.3400 while the U.S. dollar continues to lose ground against a broad basket of currencies.
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The U.S. Dollar Index is currently trying to settle below the nearest support at the 91 level. If this attempt is successful, the U.S. Dollar Index will head towards the next support level at 90.60 which will be bullish for GBP/USD.
On Wednesday, GBP/USD found itself under pressure on Brexit fears and even tried to settle below the support at 1.3300. However, it quickly received material support from foreign exchange market traders and rebounded closer to 1.3400. Brexit updates will likely remain the key driver for GBP/USD in the upcoming trading sessions.
Yesterday’s sell-off was a “demo version” of what to expect in case UK and EU fail to reach a compromise deal so GBP/USD will likely remain very sensitive to any rumors on the Brexit front.
Today, UK will provide the final reading of the Services PMI report for November which is expected to show that Services PMI decreased from 51.4 to 45.8. In the U.S., Services PMI is projected to decrease from 56.9 to 57.7.
Technical Analysis
GBP/USD failed to settle below the support at 1.3300 and rebounded closer to the resistance at 1.3400. In case GBP/USD manages to settle above the resistance at 1.3400, it will gain upside momentum and head towards the next resistance level which has recently emerged at 1.3440.
A successful test of the resistance at 1.3440 will push GBP/USD towards the next resistance level at September highs at 1.3485.
On the support side, the nearest support level for GBP/USD is located at 1.3325. There are no important levels between 1.3325 and 1.3400 so GBP/USD easily moves back and forth between these levels.
If GBP/USD gets below the support at 1.3325, it will get to another test of the next support at 1.3300. A move below the support at 1.3300 will open the way to the test of the support at 1.3270.
For a look at all of today’s economic events, check out our economic calendar.