GBP/USD Daily Forecast – Attempt To Settle Above 1.3000

British Pound Tries To Gain More Upside Momentum

GBP/USD tries to continue its rebound as the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the nearest resistance level at 93.50 and declined closer to the 93 level. The nearest support for U.S. Dollar Index is located at the 20 EMA at 93.05. In case the U.S. Dollar Index manages to settle below this level, it will gain more downside momentum which will be bullish for GBP/USD.

The Brexit story will continue to impact GBP/USD trading dynamics in the upcoming trading sessions. UK is ready to make changes to the Brexit Withdrawal Agreement, breaking the international law “in a limited way”.

At this point, the market is not sure whether this is a real intention or a part of negotiation tactics, but GBP/USD will certainly remain very sensitive to Brexit-related headlines.

Today, traders will also focus on the upcoming U.S. employment reports. Initial Jobless Claims are expected to drop to 846,000 while Continuing Jobless Claims are projected to decline to 12.93 million.

If the employment data shows that U.S. job market continues to recover, the U.S. dollar may get more support. At the same time, weak reports may lead to a sell-off, pushing GBP/USD higher.

Technical Analysis

GBP/USD managed to get above the nearest resistance level at 1.2980 and is trying to settle above 1.3000.

In case this attempt is successful, GBP/USD will head to the test of the resistance at the 50 EMA at 1.3030. The recent sell-off pushed RSI towards the oversold territory so there is plenty of room to gain more upside momentum in case the right catalysts emerge.

If GBP/USD manages to settle above the 50 EMA at 1.3030, it will gain more upside momentum and move towards the next resistance level at 1.3110. A move above 1.3110 will open the way to the test of the 20 EMA at 1.3155.

On the support side, the previous resistance at 1.2980 will serve as the first support level for GBP/USD. If GBP/USD manages to settle below this level, it will head towards the next support near the recent lows at 1.2880. #GBP/USD##FX#

Reprinted from Fxempire，the copyright all reserved by the original author.