GBP/USD Daily Forecast – British Pound Is Under Pressure Ahead Of The Weekend

GBP/USD

U.S. Dollar Gains Ground Against British Pound

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

The U.S. Dollar Index has recently made an attempt to settle above the resistance level which is located at the 50 EMA at 91.80. In case the U.S. Dollar Index manages to settle above this level, it will move towards the next resistance at the 92 level which will be bearish for GBP/USD.

Yesterday, U.S. reported that Retail Sales increased by 9.8% month-over-month in March compared to analyst consensus which called for growth of 5.9%. Initial Jobless Claims report also exceeded expectations as Initial Jobless Claims declined from 769,000 to 576,000 compared to analyst consensus of 700,000.

Better-than-expected reports provided support to the American currency at a time when it was under pressure from falling Treasury yields. Today, Treasury yields are trying to rebound after yesterdays downside move which may serve as an additional positive catalyst for the U.S. dollar.

Technical Analysis

GBP/USD failed to settle above the 20 EMA at 1.3780 and pulled back towards the support at 1.3745. Currently, GBP/USD is trying to settle below this support level. In case this attempt is successful, GBP/USD will move towards the next support level which is located at 1.3710. RSI is in the moderate territory, so there is plenty of room to gain downside momentum in case the right catalysts emerge.

If GBP/USD manages to settle below the support at 1.3710, it will head towards the next support at 1.3665. A move below this level will open the way to the test of the support at 1.3625.

On the upside, the nearest resistance level for GBP/USD is located at the 20 EMA at 1.3780. If GBP/USD gets above this level, it will move towards the 50 EMA at 1.3800. In case GBP/USD settles above the 50 EMA, it will head towards the resistance at 1.3835.