GBP/USD Daily Forecast – Support At 1.2890 In Sight
GBP/USD Video 30.10.20.
British Pound Remains Under Pressure
GBP/USD is trying to settle below 1.2900 while the U.S. dollar is mostly flat against a broad basket of currencies.
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Yesterday, the U.S. Dollar Index gained strong upside momentum amid fears about the second wave of the virus which increased demand for safe haven assets and provided support to the American currency.
The U.S. Dollar Index made an attempt to settle above the resistance at the 94 level but did not manage to gain additional momentum and declined closer to 93.85. If the U.S. Dollar Index settles above 94, GBP/USD will find itself under more pressure.
Yesterday, U.S. reported that Initial Jobless Claims decreased to 751,000 while Continuing Jobless Claims dropped to 7.76 million.
The situation in the job market continued to gradually improve but it remains to be seen whether the recent gains on the job front will be sustainable amid problems on the coronavirus front. Yesterday, U.S. reported more than 91,000 of new coronavirus cases while Dr. Anthony Fauci stated that the country was headed in the wrong direction.
Technical Analysis
GBP/USD gained strong downside momentum and is trying to get to another test of the nearest support level at 1.2890. In case GBP/USD manages to settle below this support level, it will move towards the next support at 1.2815.
There are no material levels between 1.2815 and 1.2890 so this move may be fast. Despite the recent sell-off, RSI remains in the moderate territory so there is plenty of room to gain momentum in case the right catalysts emerge.
A move below the support at 1.2815 will open the way to the test of the next support at 1.2780. If GBP/USD gets below 1.2780, it will move towards the major support level at 1.2750.
On the upside, the nearest resistance level is located at the 50 EMA at 1.2965. A move above the 50 EMA will lead to the test of the next resistance at the 20 EMA at 1.2980. If GBP/USD settles above the 20 EMA, it will head towards the significant resistance level at 1.3000.
For a look at all of today’s economic events, check out our economic calendar.