GBP/USD Daily Forecast – Test Of Resistance At 1.3900
GBP/USD Video 15.02.21.
British Pound Continues To Gain Ground Against U.S. Dollar
GBP/USD is currently trying to settle above 1.3900 while the U.S. dollar is losing ground against a broad basket of currencies.
Your capital is at risk
The U.S. Dollar Index has managed to settle below 90.50 and is trying to settle below the next support level at 90.30. If the U.S. Dollar Index gets below this level, it will head towards the next support at 90.00 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 foreign exchange market traders will focus on general market sentiment.
The yield of 30-year Treasuries has recently managed to cross the 2.00% mark but traders will not be able to get additional clues from the bond market on Monday as U.S. markets are closed in observance of President’s Day.
While higher yields may provide additional support to the American currency, it remains to be seen whether this support will be strong as traders continue to favor riskier assets.
Technical Analysis
GBP/USD managed to settle above the resistance at 1.3875 and is trying to settle above the next resistance level at 1.3900. RSI has just entered into the overbought territory but there is still plenty of room to gain additional momentum in case the right catalysts emerge.
If GBP/USD settles above the resistance at 1.3900, it will head towards the next resistance level which is located at 1.3915. A move above 1.3915 will push GBP/USD towards the resistance at 1.3935. It should be noted that GBP/USD has not visited this territory for several years, and it remains to be seen whether previous levels will be relevant for today’s trading.
On the support side, the previous resistance at 1.3875 will serve as the first support level for GBP/USD. In case GBP/USD declines below this level, it will head towards the next support at 1.3835. A move below this support level will open the way to the test of the support at 1.3800.
For a look at all of today’s economic events, check out our economic calendar.