GBP/USD Daily Forecast – Resistance At 1.3070 In Sight

Vladimir Zernov
·2-min read

GBP/USD Video 28.10.20.

British Pound Continues To Gain Ground Against U.S. Dollar

GBP/USD managed to settle above the support at 1.3030 and tries to develop additional upside momentum while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle above the nearest resistance level at 93. If the U.S. Dollar Index settles above this level, it will move towards the next resistance at the 20 EMA at 93.25 which will be bearish for GBP/USD.

Yesterday, U.S. reported that Durable Goods Orders increased by 1.9% month-over-month in September compared to analysts consensus which called for growth of 0.5%.

However, the encouraging news had little impact on the currency market as traders focused on surging coronavirus and the potential delay of the new U.S. coronavirus aid package as the U.S. President Donald Trump stated that the new aid package would be delivered after the election.

The rebound of the U.S. economy may lose steam without new stimulus, but it remains to be seen whether economic problems would hurt the U.S. dollar which may benefit from safe-haven buying.

Technical Analysis

GBP/USD has recently failed to settle below 1.3000 and gained some upside momentum. Currently, GBP/USD is trying to get to the test of the nearest resistance level at 1.3070.

In case this test is successful, GBP/USD will continue its upside move and get to the test of the next resistance level at 1.3110. A move above 1.3110 will open the way towards the next resistance level near October highs at 1.3180. There are no material levels between 1.3110 and 1.3180 so this move may be fast.

On the support side, the previous resistance at 1.3030 will likely serve as the first support level for GBP/USD. In case GBP/USD declines below this support level, it will head towards the next support at the 20 EMA at 1.3000.

If GBP/USD gets below the 20 EMA, it will gain additional downside momentum and get to the test of the 50 EMA level at 1.2970. A move below the 50 EMA will present a major problem for GBP/USD bulls and may lead to a sell-off.

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

This article was originally posted on FX Empire

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