GBP/USD Daily Forecast – Resistance At 1.3710 Stays Strong
GBP/USD Video 15.01.21.
British Pound Pulls Back Ahead Of The Weekend
GBP/USD faced strong resistance at 1.3710 and pulled back closer to the support at 1.3665 while the U.S. dollar gained some ground against a broad basket of currencies.
Your capital is at risk
The U.S. Dollar Index received support at the 20 EMA at 90.20 and is slowly moving towards the resistance level at 90.50. If the U.S. Dollar Index gets to the test of the resistance at 90.50, GBP/USD will find itself under pressure.
Yesterday, U.S. President-elect Joe Biden proposed a stimulus package worth $1.9 trillion which included $1,400 stimulus checks. The foreign exchange market reacted calmly as previous reports suggested that the new stimulus aid would be in the $1.5 trillion – $2 trillion range.
The recent Initial Jobless Claims report highlighted the need for additional stimulus as 965,000 Americans filed for unemployment benefits in a week.
Today, traders will have a chance to take a look at Industrial Production and Manufacturing Production reports for November from the UK. Industrial production is expected to grow by 0.5% month-over-month while Manufacturing Production is projected to increase by 0.9%.
Later, traders’ focus will shift to Retail Sales data from the U.S. Accoring to the analyst consensus, Retail Sales remained unchanged in December. On a year-over-year basis, Retail Sales are forecasted to grow by 3.6%.
Technical Analysis
GBP/USD did not manage to settle above the resistance at 1.3710 and pulled back towards the nearest support level at 1.3665.
In case GBP/USD declines below the support at 1.3665, it will move towards the next support level at 1.3625. This support level has been tested several times in recent trading sessions and proved its strength.
If GBP/USD settles below 1.3625, it will continue its downside move and head towards the next support level at the 20 EMA at 1.3575.
On the upside, GBP/USD needs to get above the resistance at 1.3710 to continue its upside move. The next resistance level for GBP/USD is located at 1.3755. If GBP/USD manages to get above this level, it will head towards the resistance at 1.3785.
For a look at all of today’s economic events, check out our economic calendar.