GBP/USD Daily Forecast – Test Of Resistance At 1.3745

GBP/USD Video 27.01.21.

British Pound Moves Higher Against U.S. Dollar

GBP/USD is currently trying to settle above the resistance at 1.3745 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index has managed to settle below the 20 EMA at 90.30 and is trying to get to the test of the support at the 90 level. In case the U.S. Dollar Index manages to get below this level, it will head towards the next support level at 89.75 which will be bullish for GBP/USD.

Yesterday, UK reported that Unemployment Rate increased from 4.9% in October to 5% in November while analysts expected that it would grow to 5.1%.

Meanwhile, Claimant Count Change report indicated that the number of people claiming for unemployment benefits increased by 7,000 in December compared to analyst consensus which called for growth of 35,000.

The reports exceeded analyst forecasts, but the UK job market will likely suffer an additional blow in the first months of 2021 due to the negative impact of the new, more infectious strain of coronavirus.

Today, foreign exchange market traders will focus on Fed Interest Rate Decision and the subsequent commentary. The Fed is expected to stay very dovish, but it is not clear whether it will be sufficient enough to push U.S. dollar to new lows.

Technical Analysis

GBP/USD managed to get above the resistance level at 1.3710 and is trying to settle above the next resistance which is located at the recent highs at 1.3745. If GBP/USD settles above 1.3745, it will move towards the next resistance at 1.3785.

A successful test of the resistance at 1.3785 will push GBP/USD towards the resistance at 1.3800. 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 level at 1.3710 will likely serve as the first support level for GBP/USD. If GBP/USD declines below this level, it will head towards the next support level at 1.3665. A move below this level will open the way to the test of the support at the 20 EMA at 1.3645.

For a look at all of today’s economic events, check out our economic calendar.