GBP/USD Daily Forecast – Resistance At 1.4000 Is A Major Obstacle On The Way Up
GBP/USD Video 12.03.21.
British Pound Pulls Back Against U.S. Dollar
GBP/USD made an attempt to settle above the major resistance level at 1.4000 but failed to develop sufficient upside momentum and pulled back while the U.S. dollar gained some ground against a broad basket of currencies.
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The U.S. Dollar Index received support near 91.40 and rebounded back above 91.50. The nearest resistance level for the U.S. Dollar Index is located at 91.75. In case the U.S. Dollar Index gets to the test of this level, GBP/USD will find itself under pressure.
Today, foreign exchange market traders will have a chance to take a look at the economic data from the UK. Analysts expect that Industrial Production declined by 0.6% month-over-month in January due to the negative impact of virus containment measures. On a year-over-year basis, Industrial Production is projected to decline by 4%.
Manufacturing Production is expected to decrease by 0.8% month-over-month in January. On a year-over-year basis, Manufacturing Production is expected to fall by 3.6%.
GDP report is projected to show that GDP declined by 4.9% month-over-month in January. It remains to be seen whether January GDP numbers will have a material impact on the British pound as UK has already started to move out of the previous virus-related restrictions.
Technical Analysis
GBP/USD faced resistance at 1.4000 and pulled back below the support at 1.3980. If GBP/USD manages to settle below this support level, it will head towards the next support at 1.3950.
In case GBP/USD declines below the support at 1.3950, it will head towards the next support level which is located near the 20 EMA at 1.3925.
On the upside, GBP/USD needs to settle above the resistance at 1.4000 to continue its upside move. A move above this level will be a welcome development for GBP/USD bulls as it will signal that GBP/USD is leaving the 1.3900 – 1.4000 range and is ready to develop additional upside momentum.
If GBP/USD settles above 1.4000, it will head towards the next resistance at 1.4025. A successful test of this level will open the way to the test of the resistance at 1.4050. In case GBP/USD gets above the resistance at 1.4050, it will move towards the next resistance at 1.4080.
For a look at all of today’s economic events, check out our economic calendar.