GBP/USD Daily Forecast – Test Of Support At 1.3450
British Pound Is Losing Ground Ahead Of The Weekend
GBP/USD is currently trying to settle back below 1.3450 while the U.S. dollar is gaining ground against a broad basket of currencies.
The U.S. Dollar Index remains in the 94.20 – 94.40 range. In case the U.S. Dollar Index manages to get above 94.40, it will head towards the resistance at 94.60 which will be bearish for GBP/USD.
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Today, foreign exchange market traders will take a look at the final reading of UK Manufacturing PMI report for September. Analysts expect that UK Manufacturing PMI declined from 60.3 in August to 56.3 in September.
In the U.S., Manufacturing PMI is projected to decrease from 61.1 in August to 60.5 in September. Traders will also focus on the final reading of Consumer Sentiment report which is expected to show that Consumer Sentiment improved from 70.3 in August to 71 in September. U.S. Personal Income is projected to grow by 0.3% month-over-month in August while U.S. Personal Spending is expected to increase by 0.6%.
It should be noted that Treasury yields continue to pull back from recent highs, but this move did not put any pressure on the U.S. dollar which is supported by increased demand for safe-haven assets.
Technical Analysis
GBP/USD failed to settle above the resistance at 1.3490 and declined towards the support at 1.3450. In case GBP/USD manages to settle below this support level, it will head towards the next support which is located near the recent lows at 1.3410.
A successful test of the support at 1.3410 will open the way to the test of the next support at 1.3390. If GBP/USD declines below this level, it will move towards the support at 1.3370.
On the upside, GBP/USD needs to settle above the resistance at 1.3490 to have a chance to gain upside momentum in the near term. The next resistance level for GBP/USD is located at 1.3520. In case GBP/USD gets above this level, it will head towards the next resistance at 1.3550.
For a look at all of today’s economic events, check out our economic calendar.